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The article by Jackson Rowland discusses aligning governance with investor expectations in New Zealand, focusing on insights from a recent roundtable hosted by Chapter Zero, the IoD, and the Aotearoa New Zealand Stewardship Code.
Key points include:
1. Stewardship and Engagement: Stewardship is about creating long-term value by responsibly managing and allocating capital. With increasing investor engagement in New Zealand, there is a growing trend for investors to engage with companies rather than divest if they see potential for improvement.
2. Opportunities for Collaboration: Companies and investors share a common goal of long-term value creation. By collaborating more regularly, companies can benefit from investors' sector-specific insights and avoid challenges by engaging before issues arise.
3. Effective Communication: For productive engagements, both investors and companies should focus on asking targeted questions and addressing root causes of issues. Consistent and well-informed interactions are crucial.
4. Right Representatives: Effective engagement requires having the right representatives from both sides who understand the broader industry and economic context to address issues comprehensively.
5. Constructive Engagement: In a small market like New Zealand, maintaining strong, constructive relationships between investors and companies is vital. Positive, trust-building interactions are preferred, as they lead to better outcomes for both parties.
6. Future Directions: The Stewardship Code will promote best practices for investor-company engagements and encourage more regular, high-quality interactions to enhance value and address long-term challenges.
Overall, the article underscores the importance of aligning investor and company goals through enhanced engagement and effective communication.