IOD welcomes focus on regulatory governance structures
The Institute of Directors (IoD) welcomes the New Zealand Initiative’s report Who Guards the Guards? Regulatory governance in New Zealand released today.
The report surveyed 60 companies’ experiences with 24 regulators and found that the performance was closely linked to the kind of governance structure they adopted with regulators such as the Takeovers Panel and the Financial Markets Authority (FMA) receiving the highest marks.
“Good governance is crucial to building a strong New Zealand and there is great value in reviewing and considering how governance structures can effectively drive the success of our businesses and organisations”, says Felicity Caird, General Manager of the IoD’s Governance Leadership Centre.
“A governance structure with a clear separation between the board and management enables the board to focus on strategic direction, oversee performance and risk and hold management to account.”
The report also recommends creating an independent agency to ensure independent scrutiny and standardised process for appointments to regulatory agencies.
“Ministers have a critical role in appointing board members,” says Caird.
“It is important they are well supported with good advice and robust processes. This is a good opportunity to review current appointment systems. A robust appointment process helps ensure state sector boards have the right mix of skills, experience and diversity of thought to be effective and add value”.
Caird says all governance arrangements should be based on core governance principles such as responsibility, accountability and transparency, and the issues raised in the report offer an opportunity to look at our current governance structures.
The IoD values continuous improvement and believes that driving thought, debate and discussion about the governance environment in New Zealand will help us to build a stronger future.
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