IoD supports measured pathway for dual class shares

NZX is considering whether to allow dual class share structures for some new listings. In practice, this would let a founder or other long-term holder raise public capital while keeping greater voting power than ordinary shareholders. The policy aim is to make listing more attractive to companies that might otherwise remain private or look offshore.

The trade-off is that investors may provide most of the capital without having the same influence over the company’s direction. For boards, the key issue is whether directors can still exercise independent judgement, manage conflicts and act in the interests of the company as a whole where voting control and economic ownership are not aligned.

The IoD supports a limited and reviewable pathway, with strong safeguards around board independence, ordinary shareholder rights and the continuing justification for superior voting power. In practical terms, we support NZX proceeding with a regulated pathway for appropriate new listings, subject to targeted refinements that preserve effective board accountability and ordinary shareholder protections. Much will depend on the quality of the independent directors and how the proposed DCS Governance Committee works in practice.

Read the submission