Why directors must champion social cohesion
When people lose confidence in democracy, it often follows a loss of trust in institutions, leadership, or their ability to shape outcomes.
It is no accident that the same qualities that make for effective boards – diverse perspectives, open debate, informed decisions, ethical behaviour – are also the hallmarks of healthy democratic systems.
The recent Social Cohesion in New Zealand report delivers a sobering message: the bonds that hold our society together are unravelling.
Published by the Helen Clark Foundation, it paints a picture of deepening fractures – across political preference, work participation, income and ethnicity.
Compared with Australia, Aotearoa New Zealand lags on every measure of cohesion: from sense of belonging, sense of worth and social inclusion, to perceptions of fairness and acceptance.
Most troubling of all, nearly one in three New Zealanders believe a strong leader who doesn’t need to bother with elections or Parliament would be a good way to govern.
That is a red flag for democracy – and for directors.
Democracy, like good governance, requires continual stewardship. The social cohesion report lands at a critical moment when cost-of-living pressures are rising, institutional trust is eroding, and divisions around race, inequality and civic participation are deepening.
This erosion in cohesion undermines confidence in our system of governance and risks normalising anti-democratic thinking.
At the Institute of Directors, we believe strong governance is essential not just for organisational performance but for our society’s democratic resilience. The values that underpin democracy – transparency, participation, fairness and accountability – are the same values that underpin good governance. They are not optional. They are foundational.
When people lose confidence in democratic systems, it often follows a loss of trust in institutions, in leadership, or in their own ability to shape outcomes. This is not someone else’s problem to fix. It is ours.
As directors and business leaders, we can act. We must govern in ways that build trust: through integrity, transparency and fair decision-making. We must call out disinformation and challenge populism when it erodes the norms civil society depend on. We must model civic leadership that is inclusive, future-focused and ethical.
Our governance frameworks, such as The Four Pillars of Governance Best Practice, are grounded in the principles that democracy relies on: ethical leadership, effective oversight and responsibility to all stakeholders.
Boards should actively reflect on the cohesion challenge. Questions to ask might include:
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- Do we understand the social environment our organisation operates in?
- How might inequality or exclusion affect our current and future workforce?
- Are we listening meaningfully to under-represented voices inside and outside the organisation?
- How does our governance framework reflect diverse worldviews, including te ao Māori?
- What role can we play in strengthening civic engagement and resilience in our communities?
We don’t all sit in Parliament, but we do sit at decision-making tables. They are where trust is either earned or lost, where values are either lived or forgotten.
Good governance is not only about running successful organisations – it is about helping shape the kind of society we want to live in. As directors, we must treat that responsibility with the weight it deserves.