When pressure grows, double down on purpose

Boards should test decisions against organisational purpose when facing external pressure or activism, according to respondents to our latest Pulse Check survey.

Two-thirds (67%) said boards should first reconfirm that decisions align with purpose and strategy. A further 27% prioritised early engagement with key stakeholders to understand concerns. Only 7% said boards should move quickly to minimise reputational fallout.

More than half of respondents (53%) believe most New Zealand boards are underprepared for shareholder or stakeholder activism. Forty per cent said boards are somewhat prepared but tend to respond reactively. No respondents described boards as very prepared.

Respondents were split evenly on the most significant risk, with 36% citing loss of strategic focus and 36% erosion of trust.

1. When public or political pressure escalates around a decision, what should boards prioritise first?

• • Reconfirm the decision aligns with organisational purpose and strategy – 67%
  • Engage early with key stakeholders to understand concerns – 27%
  • Stay quiet until the facts are clear – 0%
  • Move quickly to minimise reputational fallout – 7%

2. How prepared do you think most boards are for rising shareholder/member activism in New Zealand?

• • Very prepared – activism is now a routine governance issue – 0%
  • Somewhat prepared – responses are often reactive – 40%
  • Not very prepared – boards underestimate how quickly issues can escalate – 53%
  • Unsure – 7%

3. What is the biggest governance risk when decision-making becomes contested in public?

• • Losing strategic focus due to short-term pressure – 36%
  • Poor stakeholder communication and erosion of trust – 36%
  • Board and management misalignment under stress – 14%
  • Overcorrecting and weakening accountability – 14%