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Business Urged to Contribute to Regulation

Business Urged to Contribute to Regulation – or Live with the Outcomes

The development of company rules, regulations and governance in New Zealand must enter a new and more collaborative phase if we are to grow a healthy capital market and successful business environment, says the Listed Companies Association Chairman John Blair.

“The collective voice of business has to be heard and understood if New Zealand is to achieve sensible outcomes from the raft of new regulation,” says Blair. “It is increasingly important that policymakers and regulators consult early and fully with the people and organisations introduced.”

“Current moves by the Stock Exchange (NZX) and the Government to stamp out the risk of corporate wrongdoing largely focus on listed companies but will not be effective or efficient unless listed companies themselves are fully involved in the process,” says Blair.

“Fully involved” means consulted from policy development all the way through to regulation: it is not enough to develop intended laws or rules in isolation and only release them to the public for a short period of comment. Considerable frustration results from ‘one-way’ consultation when there is no discernible or reasoned response from regulators to public input.

“Equally, companies and their directors must also commit to the processes. There is no sense complaining about outcomes when no real effort has been made to contribute through the available channels.”

Blair says he sees encouraging signs of a more inclusive approach from the revamped NZX with the recent formation of the Companies Advisory Panel, a standing joint committee of NZX and Listed Companies to work through issues of common concern.

“We were also heartened by the recent willingness of NZX chief executive Mark Weldon to have another look at the Exchange’s proposals for new corporate governance rules.”

“Listed Companies strongly supports the call by the Minister of Commerce, Hon. Lianne Dalziel for business to contribute to the Securities Commission’s recently announced development of corporate governance principles, due to be completed before the end of this year.”

“Listed Companies, NZX and our regulators all have the same objective – a healthy and suitably regulated capital market in which New Zealand and international investors can have confidence. That improves availability of the capital essential to drive growth in New Zealand businesses, and ultimately the national economy,” said Blair.

Listed Companies is a voluntary, non- profit association started in 1981. It has been involved in a number of developments on behalf of New Zealand listed companies, whose number now approaches 250. Blair says that as regulation becomes more complex and invasive, he sees the need for the Listed Companies organisation to become more active than before.

“We are conscious that there is already representation by professional bodies, directors’ and shareholders’ groups and other business organisations. These each have their own specific interest groups to represent. Listed Companies is focused on the companies most affected by the bulk of rules and regulations – those listed on NZX.” said Blair.

Already well supported by a few of New Zealand’s largest companies, Listed Companies is asking all companies listed on NZX to become involved and to support a more interactive approach to issues that affect those companies and their shareholders.

“Our message to these companies is simple. If we sit back and do nothing we will get the outcomes we deserve. By doing nothing we will implicitly endorse an endless stream of ineffective regulations that may not improve corporate performance but will surely stifle enterprise, increase compliance costs and drive away investors from New Zealand’s capital markets. That is why it’s essential that listed companies are involved in creating the rules – and more importantly, the principles and policies behind the rules.”

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