What changing investor stewardship means for boards

Jackson Rowland

For most of the past decade, investor stewardship in New Zealand has been a relatively quiet conversation – happening behind closed doors, lightly disclosed and often hard to distinguish from broader investor relations. That is changing.

The Aotearoa New Zealand Stewardship Code’s 2026 State of Stewardship report finds that New Zealand’s institutional investors are more active in how they exercise their ownership rights.

Engagement with companies is deeper. Voting is more deliberate. Collaboration between investors is growing. And importantly for directors, the expectations placed on boards are becoming clearer, more specific, and more publicly documented. 

1. Investors are more transparent about their stewardship, including specific company outcomes

The most significant shift in this year’s reporting is the volume and quality of public disclosure from investors. In 2025,19 stewardship reports were published by signatories of the Code, up from 16 the year before, and just one in 2023. The reports are also more substantive: more specific about engagement priorities, more willing to describe outcomes and clearer about how voting decisions are made.

That transparency now extends to naming specific companies and describing the outcomes of engagement with them. Companies including Fletcher Building, Auckland Airport, Contact Energy and Genesis Energy were referenced in 2025 stewardship reports, with descriptions of engagement outcomes ranging from board renewal processes and revised executive remuneration structures, through to climate transition plans and improved disclosure practices.

For directors: the days of investor stewardship being a largely private exercise are passing. Investors are more accountable to their own clients and beneficiaries for the stewardship work they do. That accountability is producing more public disclosure than ever before. Boards should assume that substantive engagement with major shareholders may become part of the public record. 

2. Climate, governance and human rights dominate engagement priorities

Across the cohort of disclosing investors, the most common engagement themes in 2025 were climate-related risks (referenced in 95% of reports), corporate governance (95%), human rights and modern slavery (84%), and biodiversity and nature (58%).

Climate engagement focused on net-zero commitments, Scope 3 emissions reporting and climate transition planning. Governance engagement focused on board independence, diversity, director tenure and executive pay alignment. Human rights engagement focused on supply chain due diligence, particularly considering the proposed New Zealand Modern Slavery Bill.

For directors: these are the questions to expect from your major shareholders. If your board does not have a clear position on each of these, it will likely need one. 

3. Voting is becoming more active – and the gap between domestic and international investors is closing

Investors voted against management on an average of 12% of resolutions in 2025. Notably, the gap between New Zealand-based and international investors has narrowed significantly. In 2024, New Zealand-headquartered signatories voted against management at a rate roughly seven percentage points lower than their international counterparts. In 2025, the two groups voted at similar rates.

Director elections are the most common reason for votes against management, followed by remuneration. Concerns typically relate to board independence, diversity, tenure and the alignment of executive pay structures with long-term performance.

For directors: assume your investors are voting more actively and that the rationale behind those votes is being more clearly documented. Standing for re-election now gives many investors an opportunity to act on engagement outcomes through voting decisions. 

4. Collaborative engagement has arrived in New Zealand

In 2025, Milford Asset Management and Pathfinder Asset Management led New Zealand’s first domestic climate-focused collaborative investor engagement with the Investor Group on Climate Change. The initiative engaged Auckland International Airport and Freightways on climate transition priorities including interim targets, Scope 3 emissions and disclosure quality. Early results were tangible and the programme is expected to expand in 2026.

Collaborative engagement is well-established internationally, but has been slow to develop in New Zealand, in part because of concerns about competition law. A legal opinion and increasing maturing market practice have helped investors navigate these concerns, and collaborative engagement is likely to become a more common feature of how investors approach systemic issues.

For directors: if your major shareholders are participating in a collaborative engagement programme, the conversation you have with them is likely to extend beyond your company and draw on a coordinated investor view about good practice across the market. The leverage they bring to the table is correspondingly greater. 

5. Voting and engagement are increasingly informing investment decisions

This year’s report includes new guidance, developed in collaboration with Glass Lewis, on what good voting practice looks like. One theme is particularly relevant for directors: investors are being encouraged to integrate insights from voting and engagement into their broader investment decisions. including buy, hold and sell decisions.

This means that patterns of concern raised through engagement, if not addressed, can ultimately affect investor demand for a company’s shares. Stewardship now sits closer to portfolio management and is being treated as a genuine input to investment decisions.

For directors: the feedback loop between engagement and investment decisions is becoming tighter. Persistent unresolved concerns are more likely to translate into capital flows than they have in the past. 

What this means for boards

Institutional investors in New Zealand are becoming more deliberate, more transparent and more coordinated in how they exercise their stewardship responsibilities. The expectations being placed on boards are correspondingly clearer and more publicly documented. 

The practical implications are threefold:

• Take engagement seriously. Investors are documenting it and outcomes are increasingly visible. The quality of board engagement with shareholders is becoming a more material factor in how boards are assessed.
• Anticipate the themes. Climate, governance and human rights are now standard engagement topics. Your board should have clear, defensible positions on each, supported by appropriate disclosure.
• Treat voting outcomes as signal, not noise. “Against” votes should be treated as deliberate, rationale-driven and more likely to be publicly explained. They should be treated as a meaningful input in how the board assesses its own performance.