Source: Radio New Zealand
Scott O’Donnell was appointed to the KiwiRail board with a conflict of interest management plan that included seven mitigations. Otago Daily Times / Laura Smith
Scott O’Donnell would have been paid tens of thousands of dollars to be on KiwiRail’s board. But he missed large chunks of its meetings and quit after only eight months.
When Scott O’Donnell was appointed to KiwiRail’s board in July last year, a substantial conflict of interest plan was required.
Some of the 10 companies O’Donnell is involved with supply services to KiwiRail.
Board chair Suzanne Tindal expressed concern about O’Donnell’s numerous business interests before his appointment.
The three-year appointment, by Rail Minister Winston Peters, went ahead regardless. But O’Donnell’s conflicts would see him excluded from 15 agenda items over six board meetings. He was absent for a further 19 items for other reasons, such as travel, bringing the total number of agenda items he was not present for to 34.
In March, O’Donnell resigned to spend more time on a new business venture in Australia.
In a brief resignation note, he told Tindal he was sad to leave but would be happy to assist KiwiRail from outside the board – “just call”.
It marked the abrupt end of an appointment dogged by speculation about his ability to perform his board duties while managing so many conflicts of interest.
‘Frankly unmanageable’ conflicts of interest
Victoria University of Wellington senior research fellow Max Rashbrooke said O’Donnell’s appointment was the most egregious example of someone with significant conflicts of interest being appointed to a public board he was aware of.
“It seems very wasteful to go through all the administrative hassle of appointing someone and then the even more enormous hassle of trying to deal with their frankly unmanageable conflicts of interest, only for them to step down in very short order.”
Rashbrooke said considering how extensive O’Donnell’s conflicts were, it was debatable he was able to perform his duties in a manner the public would expect.
O’Donnell is one of the four directors of Dynes Transport Tapanui, which donated $20,000 to NZ First in July 2024.
At the time he was appointed to KiwiRail’s board, Peters said O’Donnell would be effective in his role and that the donation played no part in the appointment.
While KiwiRail confirmed the number of agenda items O’Donnell missed during his tenure, they could not immediately say how many he was present for. This would need to be addressed as an Official Information Act (OIA) request, it said, which can take up to 20 working days for a response.
It also could not immediately say what O’Donnell was paid. KiwiRail’s most recent annual report shows board members received between $57,000 and $62,000 for a full year’s tenure. However, Newsroom reported board member fees were set to increase to more than $86,000 for 2026.
KiwiRail CEO Peter Reidy, and board chair Suzanne Tindal during scrutiny week Screenshot / New Zealand Parliament
RNZ’s request to KiwiRail for an interview with Tindal was declined.
Tindal has, however, previously expressed concern about the impact of O’Donnell’s conflicts.
During Parliament’s ‘scrutiny week’ in December last year, where MPs publicly examine public agency performance, she said O’Donnell’s conflicts of interest affected the board’s capability and efficiency.
Tindal said “importantly” that directors needed to consider whether they could discharge their duties as required in accordance with the Companies Act.
She reminded the MPs present that she wasn’t responsible for selecting board members.
“Just for clarity, as you all know, I do not appoint directors.”
Documents released under the OIA to RNZ show Tindal went as far as checking publicly available information on the Companies Office register and hand-drawing what she described as an “interests diagram”.
The conflict of interest management plan set up for O’Donnell by the Treasury included seven mitigations.
ACT MP Simon Court, who raised questions about the impact of O’Donnell’s conflicts during scrutiny week, said Tindal’s response had shown O’Donnell’s appointment was unworkable.
“While I was surprised at her answer, I think, based on what Radio New Zealand has since uncovered, that it’s quite clear that the board was struggling.”
Due to the small talent pool of experienced people in New Zealand, conflicts can arise, Court said, but it was obvious the board had made every effort to work around them.
“In the end, it’s up to the minister proposing an appointment to be satisfied. I understand the minister was satisfied at the time, but, as things have worked out, it’s proven to be unworkable.”
A spokesperson for Peters said despite the high number of agenda items O’Donnell was absent for, he was effective in his role.
“We remind you that Mr O’Donnell would still be a KiwiRail director if he did not need to allocate more time to an Australian venture.”
Rashbrooke said an overhaul of the rules around appointments was needed with a focus on avoiding conflicts of interest by selecting different candidates rather than managing conflicts.
“Sometimes the talent pools will be shallow, that is absolutely true, but they’re not so shallow that they contain only one person.”
Scott O’Donnell was approached for comment.
The conflict of interest management plan included the 10 companies outlined below.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
