MEDIA: Should directors have to consider all stakeholders?

Written by Nicola Shepheard for NBR

Why are we here? What’s it all about? What do I value?

Such soul-searching can no longer solely be the domain of the young and the philosophically inclined; to do their job properly in today’s world, company directors must ask such questions about the organisation they serve – also, critically, ‘Who am I here for?’

And they must recognise that a clear purpose will drive objectives that serve the interests not only of financial stakeholders (aka shareholders) but non-financial ones too, for the long-term success of the company.

These are key concepts in a whitepaper released today by the Institute of Directors New Zealand (IoD) and law firm MinterEllisonRuddWatts, which IoD author Felicity Caird hopes will stimulate “robust debate” around so-called shareholder primacy (putting returns to shareholders above everything else) and stakeholder interests.

The paper, Stakeholder governance: A call to review directors’ duties, makes a case that the nearly-30-year-old Companies Act 1993, which, among other things, governs directors’ duties, is out of step with the times and ripe for review.

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This week, Toitū Tahua, The Centre for Sustainable Finance was launched to, in the words of co-chair Bridget Coates, unite, accelerate and encourage further development of the sustainable finance goals articulated by its founding body, the Sustainable Finance Forum in its ‘roadmap’ for future-proofing New Zealand’s financial system.

The Forum an initiative of the Aotearoa Circle, a partnership of public and private sector leaders committed to restoring New Zealand’s environment.

Read the full article here.