Top governance tips for New Zealand’s unlisted companies
Leading a private business is rarely smooth sailing, and New Zealand has a very high proportion, both in the Top 200 companies and in the wider business community. As issues and ownership structures become increasingly complex, executives and boards grapple to respond and find consensus among divergent interests.
Internationally renowned governance expert, Professor Ludo Van der Heyden spoke to an audience of New Zealand’s leading businesses at an exclusive breakfast hosted by MinterEllisonRuddWatts today.
Below we share key insights.
There are three distinct governance roles within any business
Professor Ludo Van der Heyden suggests there are three different roles for boards, naming them the:
- Management board – largely in control and responsible for short term progress, it plans, decides and executes
- Board of directors – approves proposals by management and checks progress, sets strategy, is responsible to owners and community, and seeks medium term goal achievement
- Ownership board/assembly – approves new directors as well as dividends and investments proposed by management, checks proposal consistence with the business long-term mission
Each has a unique role in guiding a privately own business, and they must interact positively with each other for strong and successful business growth.
Clear responsibility and positive interaction is key
With the majority of New Zealand’s businesses being either privately owned, co-operatives or joint ventures it is essential to have transparency regarding responsibility when it comes to governance.
Clarity is especially important for privately owned businesses which do not have defined rules like listed companies.
If you would like to discuss this topic with one of our experts, please get in touch. You can read Professor Ludo’s paper on the topic below.
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