Submission on NZX Corporate Governance Code

The NZX released an initial discussion document seeking feedback on the scope of the proposed review of the NZX Code. The response will inform a second consultation paper, containing recommendations along with an exposure draft that will be published in March 2022. NZX intends the changes coming into effect by September 2022.

The IoD’s submission provides general support for the review and the proposed areas of reform. We support the comply or explain approach to implementing the Code and encourage reporting requirements that provide for meaningful disclosure to owners and stakeholders. Any amendments and reporting requirements need to align with other codes and practices issued by standard-setters and regulators, such as the incoming climate disclosure standards issued by the XRB.

We suggest the review of the Code needs to take into account global trends around growing awareness of an entity’s social licence to operate and the expectation that the needs of stakeholders and society at large receive greater attention. We also support the establishment of the proposed NZX Corporate Governance Institute.