TOP 200: The 20/20 View – Part 1: from pain to profit

Economically speaking, things in 1990 were not greatly different from what they are today.
It was time of world recession, collapsing companies and plummeting profits – the wake tossed up by the ’87 sharemarket sinking, though slowly receding, still washed over much of the commercial landscape.
The years from ’84 to ’90 had been “politically and economically painful”, according to NZ Management’s December 1990 cover story in which it analysed the results of its ninth annual compilation of the financial performances of the nation’s 200 largest trading enterprises.
In explaining his company’s sponsorship support for the inaugural awards, Deloitte Ross Tohmatsu (as Deloitte was then) managing partner Graeme Bowker said: “The current worldwide recession and oil price rises present new challenges for us to rise to.”
How little seems to have changed!
But it seemed to us at Profile Publishing (NZ Management’s then publisher) and, thankfully, to Deloitte’s strategists who, after 20 years of commitment are still the principal sponsor and supporter of the Top 200 Awards, that 1990 was indeed an ideal time to create an event to celebrate business success. “We have sponsored these awards to encourage excellence in management and business performance,” said Bowker.
The awards were, we agreed, logical extension of NZ Management’s annual listing of the country’s largest businesses. Compilation of the list, originally 250 strong, began in 1982. It was reduced to 200 in 1990 after the crash took its toll.
Deloitte, at the time, also sponsored NZ Management’s Top 250 and re-branded 200 list, providing valuable professional grunt in verifying and analysing the financial data.
The fledgling first Awards evening was restrained affair. Around 230 top executives and partners turned up at what was then Auckland’s Intercontinental Hotel, now the Hyatt, in black tie and glamorous gown finery. They came to applaud just two Award winners – one of which proved all-too-soon to be loser. That was Fortex Group, our first Top 200 Company of the Year.
(Fortex, high flying and over-hyped South Island-based meat-processing venture, crashed and burned badly in March 1994.) Two years later we compounded the error and handed it the Best Corporate Strategy Award. How embarrassing?
However, of all the awards presented in the following 19 years, our various panels of judges never made similar mistake. In fact, their record for choosing sound companies at high points in their corporate careers is quite impressive. Some choices have been controversial, but not for reasons of subsequent failure.
The Top 200’s first Executive of the Year showed unquestionably better judgement. It went to Douglas Myers, then chief executive of Lion Nathan and man who, on that first night, turned to me and, with disturbingly fixed focus, said: “I trust this isn’t one-off, flash-in-the-pan affair.” Having assured him as eloquently as possible that indeed it would not be, my personal resolve hardened to commit NZ Management magazine to expanding and promoting the Top 200 Awards.
Both the number of Awards and the family of supporting sponsors grew as the economy emerged from its malaise. The impact of the post-crash commercial clean-out and the regulatory revolution kick-started by Labour in 1984, made themselves felt.
By 1992 there were five awards and three more supporting sponsors. By 1994 and our fifth birthday, the Top 200 Awards were “saluting” the depth and breadth of New Zealand’s economic and commercial “restructuring”. And, after working with Deloitte to develop and publish Top 50 Local Bodies performance list, Local Authority of the Year Award was included at the Top 200 evening.
Some local authorities did not, however, take kindly to any external professional scrutiny of their performance. They were, they said, “different” and their performance could not be measured on any criteria similar to that which applied in the commercial world. I still think it spurious claim. But in 1997, we dropped both the listing and award.
Back to 1994 and after-tax profits climbed 72 percent, sign indeed of those robust revival years. The tax take doubled too, not that the IRD picked up anything other than criticism. And formerly lethargic government departments were “outperforming classic corporates”. Telecom and New Zealand Post were both category winners, with New Zealand Post awarded top slot as the Deloitte/Management magazine Top 200 Company of the Year, and Dr Roderick Deane, then CEO of Telecom, our Executive of the Year.
Strong performances rolled through to the mid 1990s. Solid profits and higher than expected growth allowed for the retirement of some debt and some solid capital expenditure. The government’s tax take just kept getting bigger. However, high interest rates and an accompanying high dollar in 1995 suggested day of reckoning would roll round sometime in the not-too-distant future.
As NZ Management opined in its 1996 Top 200 issue: “Strong fundamentals achieved over the past five years mean that the country’s corporate sector hasn’t buckled under the prevailing price, (high) exchange rate, and interest rate squeeze.”
In 1997 we introduced Leadership Award, now the Designworks Visionary Leader Award, the first recipient of which was iconic business leader Sir Ronald Trotter. He was, said the judges, “a man of vision who played leading role in the evolution and revitalisation of business and economics in this country”.
By 1998 the world economy was, to put it mildly, experiencing surprisingly strong global economic turbulence – particularly in Asia. The National government had just one year left in office. The tax take fell 20 percent and the total turnover of our Top 200 companies also slipped marginally. Economic pressures notwithstanding, the corporates still looked primed to handle the rougher global conditions. We moved to acknowledge the critical role of governance in organisational performance and, with support from QBE Insurance, introduced the Chairperson of the Year Award.
By the time the Deloitte/Management magazine Top 200 Awards’ 10th birthday rolled round in 1999, more than 700 of New Zealand’s most senior directors, executives and their partners were turning up on the last Thursday each November to applaud the year’s outstanding business leaders and their organisations.
That same year, Business Ethics Award was introduced and Helen Clark’s Labour government was voted onto the Treasury benches where it would remain for the next nine years.
The second 10 years of the Top 200 Awards’ 20-year history threatened to be as compelling as the first.