I’m on a corporate governane course today and tomorrow – run by Massey University on behalf of COMU. COMU is the Crown Ownership Monitoring Unit, which “monitors the government’s investment in companies/entities owned by the Crown, assists with the appointment of directors, and provides performance and governance advice to Ministers.”
In the USA corporate governance is driven by rules, such as Sarbannes Oxley. In New Zealand (and the Commonweatlh) we have principles.
Here are the Securities Commission principles for Corporate Governance in New Zealand.
- Directors should observe and foster high ethical standards.
- There should be a balance of independence, skills, knowledge, experience, and perspectives among directors so that the board works effectively.
- The board should use committees where this would enhance its effectiveness in key areas while retaining board responsibility.
- The board should demand integrity both in financial reporting and in the timeliness and balance of disclosures on entity affairs.
- The remuneration of directors and executives should be transparent, fair, and reasonable.
- The board should regularly verify that the entity has appropriate processes that identify and manage potential and relevant risks.
- The board should ensure the quality and independence of the external audit process.
- The board should foster constructive relationships with shareholders that encourage them to engage with the entity.
- The board should respect the interests of stakeholders within the context of the entity’s ownership type and its fundamental purpose.
Also worth reading is the front section of the OECD Principles of Corporate Governance, which were originally written by a group chaired by Ira Millstein. They look suspiciously like the content we studied in Millstein and Prof. Paul MacAvoy’s Corporate Governance course at Yale.