Shareholder scrutiny on corporate governance practices will
increase over the next few years, Deloitte Dunedin audit
partner Mike Hawken says.
With many organisations still feeling the effects of the
Global Financial Crisis (GFC), it was not surprising to find
that 76% of directors surveyed by Deloitte globally and 83%
of New Zealand directors surveyed saw the level of
shareholder scrutiny increasing in the next few years.
However, increased shareholder activism need not have
negative implications, he said.
Many New Zealand directors said the increased scrutiny,
especially for closely held shareholdings, might have a
positive impact on sharpening the focus of boards on
corporate governance practices.
The Deloitte ''Director 360: Degrees of Progress'' survey was
released on Thursday.
The survey provided perspective on the views and concerns of
directors serving on boards around the world. The results
were based on interviews with 288 directors in 19 countries,
including 29 directors from New Zealand.
It also asked directors to identify the top three issues for
boards over the previous year and for the next two years.
Mr Hawken said the GFC and recovery was the dominant issue
facing New Zealand boards over the next two years, with 52%
of directors identifying it as a key issue. That was followed
by a focus on talent management (31%), capital management
(28%) and strategy (21%).
In contrast, a focus on strategy had overtaken the GFC and
recovery as the top issue for directors globally, as well as
for Australian directors, he said.
''It's striking that New Zealand directors have a materially
higher focus on the GFC compared to their Australian
counterparts, which may reflect more optimism about the
recovery across the Tasman.''
Overall, the statistics still showed a positive story for New
Zealand, Mr Hawken said.
The focus on talent management and strategy over the next two
years suggested many businesses were looking forward and
rethinking their strategies.
''Obviously, an important part of that will be finding the
talent to implement them.''
Diversity was seen as important by nearly half of the
directors surveyed. But in New Zealand, nearly 60% of
directors said their boards had introduced diversity
policies, guidelines and/or goals for board composition.
A third of New Zealand directors highlighted the importance
of diversity of skill sets as distinct from ethnic and gender
''For many New Zealand directors, this focus on diversity
extends from the boardroom to their organisations, citing
opportunities for increased diversity to enhance business
performance,'' he said.
Risk oversight remained a top priority for boards. New
Zealand directors were aligned with their counterparts around
the world, agreeing that time spent on risk oversight would
A majority of surveyed directors (68%) reported that
sustainability and corporate social responsibility were
becoming more important to the board.