Governance news bites – 30 May

A person stands by a window, holding a newspaper up to their face, partially obscuring their features.

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

Under the radar, over the wire: Third-party hacks in the retail sector

Many New Zealand directors may have missed it, but a band of hackers calling themselves ‘Scattered Spider’ has quietly crippled Marks & Spencer’s online business – and even tried similar stunts on the Co-op and Harrods. By duping a third-party IT provider through social engineering (that is, posing as trusted contacts to extract credentials), they unleashed DragonForce ransomware in late April. The result: online ordering halted until July, supply-chain chaos – some suppliers reverting to pen and paper – and the theft of customer contact details and order histories (payment data was not affected). With an anticipated £300 million profit hit and more than £500 million wiped from M&S’s market value, the episode should ring alarm bells about third-party risk, robust crisis readiness and clear customer communications protocols.

The fractured future of ESG: What NZ directors need to know

The global ESG landscape is fracturing under geopolitical pressure. While some US states are doubling down on ESG regulation, the federal government has taken a distinctly sceptical stance – most notably in court challenges and SEC backpedals. Meanwhile, the EU is selectively retreating from earlier ambitions: delaying key sustainability reporting elements while reaffirming core disclosure principles. For directors in New Zealand, these tensions matter. ESG is no longer a coherent global movement – it is a contested field, where compliance obligations, investor expectations and reputational risks differ sharply across jurisdictions. Yet this fragmentation does not lessen the stakes. It raises them. Boards must now navigate a world where ESG-related decisions can trigger not only shareholder litigation and supply chain exclusion, but also accusations of political bias.

Adding to the complexity, a new Member’s Bill in New Zealand seeks to prevent financial institutions from withdrawing services on ESG or climate grounds. This has been referred to Parliament’s Finance and Expenditure Committee. If enacted, it could place New Zealand at odds with international norms – and place directors in the crosshairs of competing expectations from regulators, customers and civil society. In this context, governance demands not certainty, but strategic judgement.

Tariff powers curtailed (for now): What it means for directors watching US trade moves

The ongoing saga and roller-coaster that is United States trade policy continued this week. This included threats of 50% tariffs on European imports into the US to be imposed in early June, only then to get a reprieve until 9 July 2025 because negotiations with the EU were back on.

More significantly, on 29 May 2025, a United States federal court (Court of International Trade) ruled that proposed tariffs under emergency powers used by the President exceeded the legal scope of Section 232 of the Trade Expansion Act. The decision clarifies the limits of unilateral executive power in trade matters and reinforces the role of legal and institutional checks in the US regulatory environment. For New Zealand directors, particularly those in export-dependent sectors or with exposure to the US market, the ruling (which is being appealed by the Trump Administration) reduces immediate uncertainty around abrupt shifts in US trade policy. More broadly, it signals that while trade tensions remain a risk factor, institutional processes continue to act as a stabilising force in key markets. Boards should continue to monitor global trade governance developments closely, especially where legal rulings affect the predictability of international supply chains, tariffs and investor sentiment.