Buddy assigns himself a job - and not one that anyone was hiring for

Background again - not my dog, my parents new addition. Middle aged dog, overweight due to inactivity and overfeeding. Has been an only dog for at least the last 2 years. Border Collie mix, possibly with spaniel or hound-ish.  Neutered.
 

Buddy joined my parents household just about a week ago, and within an hour assigned himself the job of herding their female dog, We say herding not hormones because he is flattening his head, staring and triangulating movement to push Olive around. No humping. Olive is much taller and faster than Buddy. I know from experience with my two crazy herding dogs that Olive ignores or simply outruns attempts to herd her (until I stopped them). She is not one that enjoys playing "sheep" but she tolerates it.  Unfortunately, Buddy seems to have tipped more into what I would call "OCD" with this behavior and he is not really bonded with my parents much as yet. They are slowly becoming more relevant to him.
 

Some tidbits I learned tonight:
 

1. He herds her (albeit slowly) all the hours they are awake. If she goes to lay down, he will lay down near her, then move closer and closer until she gets up, then he herds again. 

2. He pretty much ignored his "boy" who came to visit Buddy in his new home, and when Olive was locked up he chose to sit outside the closed door. It took really good food to transfer his attention back to someone he was closest too just last week.  His boy was crushed. 

3. If they body block him away from Olive, it works for a minute, but when they move away, he is back herding her.
 

That is some real dedication to herding, especially since it exhausts him with the extra weight he is carrying.  My parents figured the herding would reduce once the novelty wore off, but that does not seem to be happening. He does not seem to have an "all done"  switch yet. We need to train one or Olive soon will get offended at his doggie rudeness and chomp him.  In the meantime, it is getting him lots of exercise to burn off some of his extra padding. 
 

We went through a phase with Lily where she was pretty obsessive about chasing the cats.  That was not herding drive though - more hunt/ chase.  I recommended to my dad some of the things that worked for us: 
 

1. Tether the dog to you for substantial parts of the day and reward NOT staring at the desired item, settling, relaxing etc.

2. Teach Place

3. Use more body blocks/ space games

Anything else we can try?  They have a tough time keeping them separate for long periods of time in their house and yard, but happily both dogs are crate trained. They have a couple days a week though where they are gone for 10+ hours and need the dogs to have access to the yard via dog door. Most days someone is home at least part of the day, and they have been crating Buddy a bit during the day to give both dogs a break. 

Thanks