Hawaii’s World

By A.A. Smyser

Tuesday, September 23, 1997

How the Campbell
Estate operates

THE Estate of James Campbell is Hawaii's No. 2 private estate, has Hawaiian beneficiaries, and has a management structure far different -- and immensely more efficient -- than that of No. 1, the Kamehameha Schools/Bishop Estate.

The four trustees of Campbell get above $800,000 each a year, as do the five KS/BE trustees, but they are beneficiary-chosen on strict criteria. They confine themselves to policy-setting and oversight.

They meet in private, then communicate their policy decisions to CEO David McCoy with one voice. McCoy, in turn, is the only official conduit for operating staff communication with the board. There is plenty of intermingling but no muddying of the lines of authority and responsibility.

Their oversight of and delegation of authority to skilled employees is in sharp contrast to KS/BE. There trustees try to be both policy- setters and managers. The KS/BE "five CEO" or "five fingers, one glove" approach of putting one trustee in charge of one function, like schools, and another in charge of another function, like investments, is believed by most business people I know to stifle effectiveness.

KS/BE is charitable/educational with much of its income tax exempt. Campbell operations are private and taxable. Campbell income flows straight to the "income beneficiaries" of James Campbell, who now number 24.

They pay the taxes. They also nominate their trustees. When there is a trustee opening they meet to establish criteria for a replacement, seek suggestions on candidates, then winnow their list down to finalists to interview. They recommend their final choice to the probate court. It could reject a nomination but never has.

The current trustees include: a former president and chief executive officer (CEO) of Hawaiian Electric Industries (Dudley Pratt), a former CEO of Gaspro who next served eight years with Campbell as chief operating officer, then as CEO (Clinton Churchill), a former head of real estate and financial operations for Amfac (Paul Cassiday), and a former CEO of Theo Davies & Co. who also was business dean at the University of Hawaii (David Heenan).

Bank of Hawaii vice president, Thomas Leppert, has been approved by the court to replace Pratt, retiring at age 70, at year-end. Leppert, Churchill and Heenan are far enough below 70 they still will be serving when the estate terminates in January 2007. Cassiday must retire at the end of 1998.

Would you rather have these people running your estate, or KS/BE's Dominant Four politicians -- a former state Senate president (Richard Wong), a former state House speaker (Henry Peters), a good business pal of former Gov. John Waihee (Gerard Jervis) and a former Maui school superintendent and mayoral candidate (Lokelani Lindsay)?

KS/BE's fifth trustee, Oswald Stender, came up through the Campbell Estate ranks. He knows the "due diligence" criteria with which it has been managed but is a voice in the wilderness so far as the Dominant Four are concerned.

Stender follows the Campbell tradition of extensive community service involvement and (until the present charged atmosphere developed) openness. The Dominant Four at KS/BE have been aloof to the media and paper thin in community service compared to other top Hawaii business leaders, including Campbell trustees.

Campbell beneficiaries seem far better at trustee selection than the state Supreme Court justices who choose KS/BE trustees.

Bishop Estate Archive

A.A. Smyser is the contributing editor
and former editor of the the Star-Bulletin
His column runs Tuesday and Thursday.

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