What good investor engagement looks like

In 2023, Chapter Zero, the IoD and the Aotearoa New Zealand Stewardship Code brought a group of leading directors together over breakfast to talk about a simple shift: investors are engaging more with New Zealand companies, so what does that mean for boards?

The conversation was candid. Directors wanted the right people in the room on both sides. They wanted sharper questions that got to the root of issues rather than circling them. And they wanted relationships that stayed constructive, because in a market as small as ours, trust is hard won and easily lost. We committed to helping lift the quality of these conversations.

Three years on, that commitment has produced something new. In September, the Australasian Investor Relations Association (AIRA) and the Stewardship Code released a joint statement setting out what effective engagement between investors and listed companies looks like. As far as we know, it is the first time both sides of a market have agreed a statement like this. 

Engagement is growing, and moving into the boardroom

Investor stewardship has spread quickly since the UK introduced the first stewardship code in 2010. New Zealand’s Code is now one of more than 20 worldwide. The UK code alone has nearly 300 signatories, representing around £50 trillion in assets.

At home, the shift has been just as marked. Signatories to the New Zealand Code now manage around $3.8 trillion globally. The number of stewardship reports they publish has grown from one in 2023 to 19 for 2025. New Zealand-based investors are also using their votes more confidently: they now vote against management at a similar rate to their international peers, averaging 12% of resolutions.

Engagement is also reaching the board more often. In Georgeson’s 2024 global survey, just over half of institutional investors reported growing demand for direct contact with board members. Most also preferred to raise complex or contentious issues outside the AGM season.

The United States is moving differently. Regulatory guidance issued in 2025 led many large investors to pause or scale back routine engagement, leaving some boards without a clear view of what their largest shareholders thought. New Zealand has moved the other way, building more structure around engagement rather than less.

What engagement is for

Engagement works best as a two-way flow of information. For investors, it is how they understand and influence the long-term value of the companies they own. For companies, it is a source of market insight and early warning, often from investors who see the whole sector.

The topics are broad: results, strategy, sustainability and governance. Climate risk and corporate governance are among the most common engagement priorities for New Zealand investors, followed closely by human rights and modern slavery. Governance accounts for the largest share, at around 38% of engagements.

Most investors also now set out how they escalate a concern: from management dialogue, to the board, then to voting or collaborative pressure if progress stalls. Good engagement keeps conversations in the first two stages. 

What both sides have agreed

The statement came out of a series of roundtables hosted by NZX over 2025 and 2026. They brought together CEOs, CFOs and investor relations leads from New Zealand’s largest listed companies, alongside the asset owners and managers responsible for a significant share of the capital invested here.

The statement asks both sides to be clear about what they want from an engagement and to come prepared. 

• • Investors set out the purpose in advance – what they want to discuss, who will attend and what they hope to take away – and coordinate across their own teams.
  • Companies bring the people best placed to respond. That is not necessarily the CEO, CFO or IR lead – it may mean directors.
  • Companies avoid surprises, sharing contentious matters early so investors can engage before positions are set.
  • Investors take concerns to the company first, and early, rather than letting them surface through third parties. 

Four principles describe what good information looks like: 

1. Simplicity. Volume is not a proxy for quality, either in disclosures or the requests that drive them. 
2. Relevance. The most useful information is what management actually uses to run the business. 
3. Transparency. Frank, specific communication builds more credibility than defensive language, on both sides. 
4. Proportionality. Smaller companies can meet the spirit of the statement simply, and investors scale their requests to match.

How this works in practice

Capital allocation. The statement’s own example sits squarely with the board. A company that sets out its own framework for how it sequences reinvestment, debt and returns to shareholders gives investors something concrete to engage in. Major decisions, such as acquisitions, dividends or buybacks, can then be explained against that framework. Investors, in turn, test decisions against the company’s logic rather than their own assumptions. Even a short statement in the annual report, plus a paragraph in each results announcement, makes engagement easier to prepare for on both sides.

Climate. In 2025, Milford and Pathfinder led New Zealand’s first domestic collaborative climate engagement through the Investor Group on Climate Change. They engaged Auckland International Airport and Freightways on interim targets, Scope 3 emissions and disclosure quality. The engagements were constructive and helped clarify disclosure expectations and longer-term strategy. It followed the same pattern set out in the statement: a clear purpose, a coordinated conversation and both sides prepared.

Questions for boards

• Do we know who our key investors are, and what they are prioritising?
• When should directors join engagements, and who should attend?
• Does what we tell investors match what the board actually looks at?
• Have we set out a capital allocation framework investors can engage against?
• Would our key investors hear about a contentious decision from us first? 

The directors around that breakfast table in 2023 asked for better conversations. Companies and investors have now set out what that means. We’d welcome directors’ feedback on how the statement works in practice. You can read the full statement here.