Governance news bites – 11 July

Governance is often in the headlines, and the last few weeks have been no exception. Recent news related to governance includes:

Lead locally: IoD director members wanted for school board and local government

Elections for school boards run from 3-19 September 2025, and local bodies from 9 September to 11 October 2025. IoD members with governance training and board experience could help to lift standards in both arenas by putting themselves forward as candidates.

Some school board chairs approached us to promote IoD director members standing for school board election, noting the real difference skilled governors with IoD training make. An April 2025 survey of school board leaders found that “emerged from the data was related to clarifying the Board model and the difference between governance and management.” [emphasis added]. Meanwhile, an earlier report for the Education Review Office pointed out the challenge of measuring board impact on student outcomes, yet reaffirmed that effective governance remains vital.

At the same time, city, district and regional councils miss out when experienced directors don’t stand – often citing low remuneration – despite some mayors publicly encouraging skilled candidates to run.

If you’re considering a new board role, now’s the time to step up and share your governance expertise, particularly if you have been seeking a governance and role and haven’t secured one.

From trade tensions to AI rivalry: Preparing New Zealand boards for the next turbulence

In a recent “Directors Quarterly”, KPMG International warns that shifts in power, fragmenting trade hubs, regulatory whiplash, a politicised technology race and strained supply chains will reshape corporate strategy. Emerging economic “nodes” beyond traditional centres are forcing companies and other organisations to rethink footprints even as the AI and quantum computing rivalry threatens to fragment global markets. Trade protectionism, cyber skirmishes (particularly considering tensions in the Middle East and eastern Europe) and climate-fuelled disruptions (including those we have seen in Texas, Florida and New Zealand) are stacking pressure on critical shipping chokepoints, while demographic shifts and AI integration risk a fresh talent crunch. For New Zealand directors, this translates into an imperative to stress-test supply chains, sharpen regulatory and cyber defences, and embed scenario-based risk frameworks at the board level. Only by prioritising workforce agility (including succession planning) and clear risk governance can New Zealand boards navigate the turbulence ahead.

Climate targets vs client mandates: The new BlackRock balancing act

A July 2025 research paper, “Climate Risk Engagements” analyses BlackRock’s (one of the three major global institutional investors) 2020-2023 stewardship records. The authors find that BlackRock’s so-called “climate risk engagements” achieved only modest Scope 1 and 2 (closest to the firm’s) emissions cuts, averaging about 7.5% per annum. This is well short of a 1.5°C aligned trajectory. The paper also argues that, as a passive-index behemoth, BlackRock lacked both the incentives and tools to drive deep decarbonisation, instead focusing on routine dialogue with high-emitters. Since that period, however, BlackRock has diversified its product line to give clients explicit choices, ranging from plain-vanilla index funds to more targeted ESG and climate-themed strategies. This investor has notably softened its top-down pressure on portfolio companies. In his January 2025 letter, Larry Fink underscores that BlackRock’s primary duty is to meet varied client objectives rather than impose a uniform sustainability agenda, urging investors to select funds that match their own risk and return horizons, a marked contrast from his earlier letters from the early 2020s.