IoD supports capital markets growth agenda but greater director engagement needed
The Institute of Directors (IoD) has welcomed the release of the report Growing New Zealand’s Capital Markets 2029 and calls for greater involvement of directors in determining the way forward for our capital markets.
“It’s important to have an agenda to deliver more vibrant capital markets with increased opportunity and wealth for New Zealanders,” says Felicity Caird, GM Governance Leadership Centre of the IoD. “But it’s equally important the regulatory framework continues to attract experienced directors, and supports them to focus on long-term strategy and appropriate risk.
The report, initiated by the Financial Markets Authority and NZX, includes recommendations to review the liability settings for continuous disclosure and to remove the requirement to provide prospective information for IPOs.
“We support these recommendations as part of improving New Zealand’s capital markets, and these are consistent with our submission to the Steering Committee,” says Ms Caird.
“This is a positive move because we know directors are already struggling under the weight of compliance and red tape. Our ultimate fear is that if regulation is too onerous, boards may become more risk-averse and highly competent directors could be deterred from serving on the boards of listed companies.”
Ms Caird says more dialogue with policymakers and stakeholders around regulation, including in relation to the trend of laws extending director personal liability was crucial.
“This issue requires a holistic, system-wide view. We need honest and diligent directors around boardroom tables to ensure New Zealand’s economy continues to grow. And that means the regulation governing directors should be appropriate and not unfairly prejudicial.”
The Steering Committee recommends establishing an advisory group to support capital market regulation. “It’s critical that directors are represented in this group to ensure they are at the heart of the design of our capital markets,” says Ms Caird.