Rakon board battle shows growth in shareholder activism

With Rakon informing the NZX that there is battle for the board coming up at its AGM, it seems the tide of shareholder activism continues to rise.

In New Zealand and internationally, we're seeing more shareholders attempting to get board seats, challenge appointments or gain influence over who chairs the board. 

That’s not new, but the motivation behind this wave of shareholder activism is very modern.

As one Rakon shareholder recently stated in their campaign to become a board chair: “I do feel that the priorities from the board have been too heavily biased towards the governance of the company rather than the business objectives of driving growth…”

It’s a revealing comment. And one that suggests the very idea of governance is being misunderstood – even by those seeking to lead.

What is governance really for?

For some, “governance” has become synonymous with risk aversion, process and reporting. But that was never its purpose. Great governance should be about leadership, foresight, long-term value creation and growth.

When boards are seen as slow-moving or preoccupied with oversight, it’s no surprise that activist shareholders push for a different focus. 

But this risks ignoring an essential truth: growth without governance lacks integrity and often proves unsustainable.

Boards must take this moment not only to defend good governance – but to redefine it.

Governance, at its best, is strategic. It connects the organisation’s purpose with its long-term performance. It sets direction, challenges thinking and supports strong management. It balances risk with ambition.

Governance is not management. It is the work of setting the purpose and values of an organisation, and ensuring the organisation is both effective and accountable.

That work is anything but passive. It is where growth begins.

Why this matters now

The pressure from activist investors is a signal, but it’s not the core problem. 

The greater risk is that boards, themselves, begin to internalise a limited definition of governance. That our own language, frameworks and practices signal that our role is to comply, not to catalyse.

As directors, we must ask ourselves:

• • Do our board agendas reflect the strategic priorities of the organisation, or are they dominated by assurance and reporting?
  • Are we spending enough time on growth, innovation and long-term risk?
  • Do we articulate the value of governance in ways that inspire trust, performance and ambition?

If we cannot explain the value of governance in growth terms, we should not be surprised when others try to redefine our role.

Now is the time to speak with confidence about the value boards bring not just to shareholders but to all stakeholders.

That includes:

• • being explicit that governance enables strategy and innovation, rather than constraining it
  • ensuring board composition reflects future capability needs, not just today’s assurance focus
  • lifting boardroom practice from passive oversight to active contribution, through strong purpose, debate and stewardship.

Reframing governance in this way is not defensive, it is ambitious. It’s about giving confidence to markets, communities and shareholders that governance is the platform from which resilient, ethical and successful organisations are built.

First published on BusinessDesk.