When shareholders vote against directors, they are voting on trust

New Zealand directors are seeing a clear shift in how shareholder dissent shows up – and what it signifies.

Unlike Australia, New Zealand does not have a formal “two-strikes” regime on executive remuneration. But that has not insulated boards from investor pressure. 

Instead, shareholder scrutiny is increasingly expressed through director elections, approval of equity-based compensation schemes and remuneration pools, and AGM questioning and public accountability. It is becoming more targeted, more explicit and harder to dismiss.

In 2025, New Zealand Shareholders’ Association-backed activism resulted in the removal of the board at New Talisman Gold Mines. Shareholders at SkyCity protested the re-election of directors amid ongoing governance and performance concerns.

Auckland International Airport faced a shareholder vote against a director in 2024, while Fisher & Paykel Healthcare saw opposition to a proposed director pay increase in 2023. At Fletcher Building, sustained shareholder pressure in 2024 focused squarely on capital raising decisions and governance oversight.

Meanwhile, at NZME (New Zealand Media and Entertainment), Jim Grenon, who publicly acquired a substantial stake in NZME, pressed for an overhaul of the board and governance, citing poor financial performance and concerns over high executive costs, including the CEO’s pay relative to performance. This emboldened other shareholders to leverage their voting power to challenge management and board direction.

These were not protest votes. They were judgements about trust.

The governance review at New Zealand Rugby and the subsequent establishment of a re-constituted board is a clear example of this dynamic extending beyond listed companies. It illustrates that boards across all sectors are increasingly subject to stakeholder expectations about performance, transparency and stewardship. 

Where confidence erodes, stakeholders – like shareholders – are prepared to use whatever influence they have to challenge board composition, direction and decision-making.

Across these cases, shareholders used the mechanisms available to them to express concern about leadership credibility, decision-making and board stewardship. The common thread was not short-term underperformance, but unease about whether boards were governing in a way that protected long-term value.

That shift matters.

Reputation has become a governance indicator

Our Future of Reputation 2030 research, based on interviews with 44 senior governance, reputation and corporate affairs leaders globally, found a consistent message: reputation is no longer an abstract or communications-led concept. It has become a governance indicator.

Boards and executives are increasingly judged not by what they say they stand for, but by what their decisions and behaviour demonstrate under pressure.

For shareholders – particularly long-term retail investors and institutions with intergenerational horizons – reputation now functions as a proxy for risk. When confidence in leadership, culture or oversight erodes, shareholder tolerance narrows quickly.

This is why director-specific votes have become such a powerful signal in New Zealand. Where investors cannot express dissatisfaction through a binding remuneration strike, they vote where it counts most: on who sits around the board table.

What shareholder dissent is really saying

Votes against directors rarely arise suddenly. They tend to reflect an accumulation of unresolved concerns, such as:

• • Gaps between stated values and observable decisions
  • Weak accountability for major strategic or capital allocation outcomes
  • Limited transparency around risk trade-offs
  • A perception that shareholder feedback has been heard but not acted upon

When these issues persist, dissent escalates – not because shareholders are inherently activist, but because they are exercising stewardship.

From a director’s perspective, this is a critical reframing. These votes are rarely about a single decision in isolation. They are assessments of whether the board listens, learns and governs in a way that earns confidence over time.

Reputation now requires evidence

One of the strongest findings from the research is that trust must now be proven.

Boards can no longer rely on reputation as accumulated goodwill. Stakeholders scrutinise leadership behaviour, governance processes and cultural signals with far greater intensity – and with more data than ever before.

Several themes stood out:

• • Leadership behaviour and culture define credibility. When behaviour at the top is inconsistent, reputational deterioration follows quickly
  • Silence is no longer neutral. In contentious environments, lack of clarity is interpreted as avoidance
  • Complex risk amplifies governance consequences. Cyber exposure, misinformation and regulatory scrutiny magnify even small missteps
  • Boards increasingly want reputation intelligence. Non-financial indicators are moving into board papers alongside financial and operational metrics

This means reputation must be governed with the same discipline as capital, risk and performance.

Early warning signals boards should heed

A vote against a director, or sustained public challenge from shareholders, should be treated as an early warning signal – not a reputation irritation.

In many cases, organisations already understand where the pressure points lie. What shareholders are testing is whether the board has:

• • Acknowledged the issue
  • Explained its decision-making clearly
  • Adjusted course where appropriate
  • Strengthened oversight and accountability

When those steps are absent or unconvincing, dissent hardens.

Sustaining trust in a tighter accountability environment

Boards that navigate this environment best treat reputation as a standing governance responsibility, not a post-event repair task.

In practical terms, that means:

• • Explicitly linking culture, risk, performance and reputation in governance frameworks
  • Ensuring purpose and values are tested through decisions, not just statements
  • Monitoring non-financial indicators such as culture, conduct and stakeholder confidence
  • Engaging early and transparently with shareholders when trade-offs are complex
  • Treating dissent as intelligence, not defiance

For New Zealand directors, the signal from recent shareholder actions is clear. Investors are watching how boards behave, not just what outcomes they deliver. Director elections are becoming a referendum on trust.

The challenge ahead

New Zealand’s governance framework offers fewer blunt shareholder instruments than some offshore markets. But where formal mechanisms are limited, expectations of director accountability rise.

Reputation is now one of the clearest ways those expectations are expressed.

Boards that recognise this – and govern accordingly – will be far better placed to maintain confidence, navigate scrutiny and lead through complexity. Those that dismiss shareholder dissent as episodic or unfair risk discovering, too late, that trust has already been withdrawn.

In today’s environment, reputation is not what a board says about itself. It is what shareholders conclude when they cast their vote.