Under act's rules and constitution, the supreme governing body of ACT is its Board of Trustees comprising the president, vice president, leader, deputy leader, one MP elected by caucus, and seven regional board representatives. In other parties, such people are elected by the vote of the delegates who happen to be present at the annual conference. ACT by contrast requires regional Board members to be elected by annual postal ballot of all ACT party members resident in the electorates which make up the region. The president and vice-president are elected by postal ballot of all ACT members nationwide.

Under our constitution, because our Board members so directly represent and are accountable to the grassroots of the party, we rely on their individual judgment to keep ACT on the right path at all times and, as necessary, to use their influence over the Parliamentary party. They have the responsibility, as keepers of the ACT faith, for mediating between the party, the Parliamentary caucus and the rest of our membership. There is no case for diluting this direct democratic selection process, and as long as that process stands, no case either for reducing the responsibilities we impose on the Board.

During the 1999 campaign, the members of the Board found themselves faced with a level of optimism among some of their professional campaign managers that was unjustified. They were, despite significant misgivings among some Board members and party officials, reluctant to throw their weight about in the face of this expressed professional confidence. In the event, outcomes proved that the slippage some feared late in the campaign had in fact occurred.

Humility is very fine in its place, but ACT has a good Board of Trustees. Its members should have the courage of their convictions.

The Board policy committee performs an invaluable function, and should remain in place. But it needs to place increasing emphasis, in the next two years, on educating party members about what works, and what will not work, in the application of public policy. Those members are by far the most powerful selling mechanism available to the party.

The committee should be an important stimulus in helping us clarify the key elements of our economic and social policy and the role of government in delivering economic and social gain.

Over many years, the process of candidate selection has been one of the weakest and most unsatisfactory features of the New Zealand political system. The selection processes used in both the National and the Labour parties have, in the whole of living memory, been consistently unable to field candidate teams of adequate average overall quality. Often all they had to survive to get elected in the first place then go on being selected at successive elections was one short speech at their original selection meeting, in front of a bundle of personal friends and an aging bunch of their own local interest-group cronies.

Under ACT's system, people interested in becoming candidates apply to the Board to go on a candidates' register. Applications are evaluated against criteria set out on the application form, to keep out criminals, paedophiles, and so on. Anyone on the register can put themselves forward for electorate selection. Where electorates have more than 300 members, they make the final choice. Where it's less, choice rests with the Board which, to date, despite its ultimate power, has always respected the wishes of the local people.

After each election, except for elected MPs, the old candidates' register is cleared. A new register is opened, and the selection process starts again from scratch. 1n future, to assist all contenders and further candidate quality, we should establish internal education and training programmes on the operation of a market economy, promoting the message in accordance with ACT principles, electorate organisation, team-building and fund-raising.

Potential candidates should successfully complete that programme before becoming eligible to go on the ACT register for potential candidates. ACT needs the best people it can get. Those people deserve our best help to bring them fully up to speed as candidates, on policy, presentation, organisation, how to influence, teaching others and all of the practical activities essential to running a sound electorate.

They also need the assistance of continual on-going assessment to tell them how they are faring and how to improve. The emphasis must always be on merit and performance.

There is no future for ACT in protecting inadequate performance or inappropriate priorities of any kind at the expense of ACT as a whole and the achievement of its goals.

The Board will, of course, need to retain its existing right to consider the selection on merit of eminently qualified people, and create improved opportunities for candidates to develop a strong local base for the party to win a reputation and make an impact. The early appointment of electorate coordinators should be a priority.

In an MMP system, the ranking of list candidates inevitably becomes, for every political party, a painful and divisive issue. Many of our hardest-working people become involved in politics not just because they have an interest in good government that improves the lot of New Zealanders, but also because they are personally ambitious. The desire for advancement is one of the strongest forces motivating all human beings, and it can be a devastating experience for anybody, not to get a preferment we set our hearts on.

Properly harnessed, self-interest is a huge source of energy for the good of the party and the nation. If the tail wags the dog, of course, all hell is going to break loose, as we saw in New Zealand First at the time of their list candidate selection. The same so-called agency problem affects every government department and private business in the country. How do you ensure that the interests of executives and staff are properly aligned with those of the owner? That staff profit when they serve the interests of the owner, but lose heavily if they use the organisation as a vehicle to serve themselves at the owner's expense.

Everybody involved with ACT needs to understand that, when list rankings are established, disappointment is inevitable. There can always be only one person ranked in first position, one at 5th, one at 10th, and so on. Disappointment, if we let it, can afflict everybody on the list from 2nd place down. The higher the general quality of our candidates, the greater the number of people with potential for serious disappointment.

ACT must improve its management of candidate expectations. To do that successfully, we must ensure that we have a rigorous, on-going process in future for assessing our candidates, and keeping them in touch with their own progress. They need to know where they stand, and how to improve their own ranking prospects.

Members of the Board must continue to play the key role in selection. To fulfill that role, they must meet and make full assessments of all potential ACT candidates

ACT must create a transparent process which, among other things, ensures that disappointed people, MPs or Board members or others, cannot put personal aspirations or disappointments ahead of ACT interests, or prejudice our ability to put the country first.

No ranking will ever command the complete agreement of those who hoped for better placement, but quite clearly, we didn't get everything wrong in the process of selecting and ranking candidates. Nationwide, the centre-right share of the vote dropped from 54% to 42%, with National down 3.3% from 33.8% to 30.5%. ACT was the only centre-right party to improve its share of the vote against that swing.

We had 53 electorates which, adjusting for boundary changes, increased their party vote on 1996 figures. In 41 cases, their gains were in the 10-25% range.ln 21 cases, our gains ranged from 25% right up to more than 50%. That is a huge tribute to the quality of the selection, and to the preparation and dedication of those candidates.

We lost party vote in 13 of the 67 seats. In most of those cases, the loss was minor. There were less than a handful of seats where ACT candidates performed substantially worse than their personal expectation and the expectation of the party. That was galling for them and for us. 1t nullified the gains of some of our other candidates, and it cost us more than the 8120 votes we needed to put an additional extra MP into Parliament. We need to look very carefully at what went wrong in those cases, and seek means to help those candidates to deliver improved future performances.

The Board should not be tolerant of petulance in poor performers. Blaming others or engaging in a bit of flashy riot and rebellion are not responses that serve the party. For all of us, the constructive thing is to knuckle down to the real task, improve our performance, remember the goals of the party, and align all our effort with those goals.

A sense of perspective is essential. David Lange, forming his first cabinet, told me he had a problem. Mike Moore was absolutely desperate to be No. 3 in cabinet ranking, after the leader and deputy leader. Would 1 mind or care, David asked, if he appointed Mike in that position ahead of me. What's to mind! Nobody in the real world thinks about numbers like that. What matters is the quality of the performance you deliver to the nation. The rest of it is just so much status-seeking garbage.