Public listed companies can expect to see a rise in shareholder activism as the economy continues to recover. Photo: RNZ / Rebekah Parsons-King
New Zealand's public listed companies can expect to see a rise in shareholder activism as well as major legal reforms ahead as the economy continues to recover.
Legal firm Chapman Tripp's latest Corporate Governance Trends and Insights report indicates big changes ahead for the boards of NZX companies.
"It's a dynamic period for bold governors. There's quite a lot of change going on in our own business. We're confronting what artificial intelligence means for us, as are many businesses," Chapman Tripp corporate partner Roger Wallis said.
"There's a lot coming up. We're coming out of a deep recession, so with that comes quite a few opportunities for boards to have a fresh think about how they can get the best outcomes for their shareholders and other stakeholders."
He said there were likely to "some quite profound changes in the way that companies are managed" over the next two or three years.
"Some of that will come out of law reform. Some of that will come out of the needs of investors at the time, as the marketplace changes."
Among the changes would be an increase in shareholder activism from large and small shareholders, which was expected to gather further speed over the next 10 to 15 years.
"The world in which boards operate has become more difficult and the statutory framework has struggled to keep up," he said.
"Obvious examples of this are the emergence of social media and the intrusion of privacy that it allows, and the pendulum swing away from prescription and toward simplicity."
Contributing factors for increased activism
- Larger shareholders with deep pockets seeking to increase their stake and influence
- A continuing flow of small shareholders to the share market, and their ability to mobilise through Sharesies and the New Zealand Shareholders' Association
- A complex mesh of challenges that businesses will have to negotiate - the AI revolution
environmental, economic and regulatory impacts of climate change, the changing geopolitical environment and what to expect as developed economies, including New Zealand, confront stubborn fiscal constraints and the social pressures they will generate.
The law reforms coming
"Reform of the governance statutory framework is very much on the agenda for 2026," Wallis said, adding change had been coming for some years.
The Law Commission was expected to advance a review of directors' duties, with the final report due before the end of 2027.
Wallis said the reforms would also include modernisation, simplification and digitisation changes to the Companies Act, including the long-awaited director role-holder identification number.
"There's some things NZX can do to make things simpler for high growth companies -- to make the settings more attractive, more flexible," Wallis said.
"There's a role to make it easier to convey information to investors using more modern technologies, but for the governors of those companies, that puts a special onus on them to make sure that investors are getting high quality information.
"And so there are some useful things that the government is working on with NZX to try and make the rules more useful for investors and less costly for issuing companies."
Changes in board compensation
Wallis said there had also been a welcomed shift in board composition of the NZX Top 75 over the past nine years:
- The proportion of women directors as of 31 March 2025 was 35 percent, compared with 29 percent in 2017 and 24 percent in 2015
- Women comprised 25 percent of board chairs compared with 8 percent in 2017
- Heavier preponderance of independent directors to 78 percent from 68 percent in 2017.
"I think it's just recognition of the benefits of greater diversity of thought," he said, adding the length of time directors sat on boards had also changed.
"On average it's only six years. . . that's a healthy thing, that there is turnover and change over time, so that people bring fresh perspectives."
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