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The Rise of Artificial Intelligence the Rise Magazine of the Institute of Directors in New Zealand AUG/SEPboard 2017 room THE RISE OF ARTIFICIAL INTELLIGENCE ELECTION SPECIAL BUILDING GREAT ORGANISATIONS STARTS AT THE TOP Building a governance Slavery; a Building blocks for Gender pay gap is closing What’s your value add? pipeline modern problem? innovation A PARADIGM SHIFT IN WEB APP SECURITY FORTIFY YOUR WEB APPS FAST If your business has failed a PCI compliance audit, a penetration test; or has out of date software or 3rd party applications that are leaving you vulnerable – you need RedShield. RedShield protects your mission-critical web apps fast, allowing you to remediate issues later. To learn more about how this innovative service can save your business time and money contact Kordia – the exclusive Australia and NZ agent for RedShield – on 0800 567 342 or visit Kordia.co.nz/redshield SHIELD FIRST. THEN REMEDIATE. KNZ0246_Boardroom_Fullpage_v4.indd 1 7/07/17 11:27 AM August/September 2017 BoardRoom | 3 A PARADIGM SHIFT IN WEB APP SECURITY 8 Building great Inside this organisations starts edition at the top 10 Walking the talk As we pass the year’s halfway 12 The rise of Artificial mark, and our annual general Intelligence meeting, BoardRoom is pleased 18 Building a governance to feature Liz Coutts our new pipeline President, and share more about 22 Slavery; a modern our Chief Executive Kirsten problem? Patterson, with a profile on each. 24 The building blocks Our cover story is thanks to a former for innovation New Zealand journalist who is now 28 Cyber resiliency for today based in Japan, who shares the and tomorrow rapid rise of artificial intelligence 30 What’s your value add? and its implications already seen 32 A glimpse into the over there. She looks at what’s mind of your CEO: KPMG happening in New Zealand and what New Zealand survey directors need to be thinking about. 34 Gender pay gap closing: IoD Directors’ Fees Report This issue also has a strong focus on 36 Election special diversity, with an introduction to the 41 GLC Update 24 new mentees of the Mentoring 8 Building great 42 Taking the plunge into for Diversity programme and talks formal governance to four leading directors on why organisations their boards have a Future Director. starts at INSIDE IoD We also put three questions 5 CEO Report to this year’s political parties. the top 6 Upfront Check out who responded and 44 Out & about what they want to say to you. 46 Events Diary FORTIFY YOUR WEB APPS FAST Institute of Directors in If your business has failed a PCI compliance audit, a penetration test; or has out of date software or 3rd New Zealand (Inc) party applications that are leaving you vulnerable – you need RedShield. Mezzanine Floor, 50 Customhouse Quay RedShield protects your mission-critical web apps fast, allowing you to remediate issues later. PO Box 25253, Wellington 6146, New Zealand To learn more about how this innovative service can save your business time and money contact Kordia tel: 04 499 0076 10 Walking the talk 12 The rise of AI – the exclusive Australia and NZ agent for RedShield – on 0800 567 342 or visit Kordia.co.nz/redshield fax: 04 499 9488 For the benefit of Is AI on your agenda? email: [email protected] New Zealand www.iod.org.nz SHIELD FIRST. THEN REMEDIATE. ISSN 0113-3004 KNZ0246_Boardroom_Fullpage_v4.indd 1 7/07/17 11:27 AM 4 | BoardRoom August/September 2017 BoardRoom is published six times a year by SENIOR LEADERSHIP TEAM COUNCIL 2017/18 the Institute of Directors in New Zealand Chief Executive Officer Liz Coutts, President; Alan Isaac, (IoD) and is free to all members. Subscription Kirsten Patterson Vice President; Dr Helen Anderson, for non-members is $155 per year. Wellington; Des Hammond, Bay of Manager, Membership, Marketing and Plenty; Julia Hoare, Auckland; Jackie BoardRoom is designed to inform and Communications Lloyd, Wellington; Simon Lockwood, stimulate discussion in the director Nikki Franklin Waikato; Vincent Pooch, Canterbury; community but opinions expressed in this Manager, Governance Leadership Centre Geoff Thomas, Otago Southland; Clayton magazine do not reflect IoD policy unless Felicity Caird Wakefield, Auckland; Sarah-Jane Weir, explicitly stated. Nelson Marlborough Corporate Services Manager Editor Chris Fox COMMERCIAL BOARD Emma Sturmfels, 027 536 8062 or email Catherine McDowell, Interim Chairman, General Manager Commercial [email protected] Alan Isaac, Liz Coutts, Kirsten Ralph Dr Alison Harrison, Rangimarie Hunia Contact the Editor for any advertising Branch Network Manager queries. Peter McLellan BoardRoom is designed by Strategy Creative, strategy.co.nz BRANCH MANAGERS Institute of Directors in New Zealand (Inc) Auckland Taranaki Mezzanine Floor, 50 Customhouse Quay, Shirley Hastings Julie Langford PO Box 25253, Wellington 6146, Bay of Plenty Waikato New Zealand Tel: 04 499 0076 Laura Gaveika Megan Beveridge Fax: 04 499 9488, Email: [email protected] www.iod.org.nz Canterbury Wellington Sharynn Johnson Pauline Prince Nelson Marlborough The Institute of Directors has staff based at Karen Goodger the National Office in Wellington, an office in Auckland, and eight branch Otago Southland managers operating from their localities. Vivienne Seaton For National Office, telephone 04 499 0076. BoardRoom is pleased to acknowledge the support of: NATIONAL PARTNERS NATIONAL CYBERSECURITY PARTNER asb.co.nz marsh.co.nz aurainfosec.com 0800 803 804 0800 627 744 04 894 3755 NATIONAL SPONSORS chapmantripp.com kpmg.co.nz 04 499 5999 09 367 5800 August/September 2017 BoardRoom | 5 CEO REPORT As directors we play a significant role Tēnā koutou Despite our position as a small island As directors we play a significant role nation down at the bottom of the world, in ensuring New Zealand’s reputation is IOD BY NUMBERS New Zealanders are well known as a nation maintained while offshore. We also must of travellers. For generations, much of take responsibility to help build trust our economic prosperity has come from in our economic systems. Whether it is sharing New Zealand with the world. ensuring transparency and fair value in our remuneration systems locally, or whether it You will be aware that that the Business 2436 is ensuring transparency and fairness in our Growth Agenda (BGA) is to increase members of the IoD supply chain overseas, good governance, exports from 30% to 40% of GDP by 2025. are women (28.9%) To quote the NZTE purpose: “to grow ethics, and integrity make the difference. companies internationally – bigger, better, While exciting from an innovation faster - for the benefit of New Zealand.” perspective, the rise of Artificial Intelligence (AI) is only going to increase the ethical Soon all members will receive a new 2017 debates at the boardroom table – how do 8428 edition of our cornerstone publication, we calculate and value the choices ahead? The Four Pillars of Governance Best IoD members Practice. The first significant update Given this edition of BoardRoom coincides since 2014, new sections on purpose, with election season, we asked all sustainability, and human rights in business, registered political parties how they are a reflection of the areas where the would address the 3Is – Innovation, directors of today are needing to exercise Infrastructure, and Inequality. Innovation 894 choices and leadership every day. and infrastructure are essential to Chartered Members achieving the BGA, for it to achieve its of the IoD New Zealand has an extremely attractive purpose of this growth being for the economic and business environment, and benefit of all New Zealand. We also need to yet we cannot afford to get complacent or ensure we all have an opportunity to share too comfortable here at home. Whether in the resulting prosperity. Nā tō rourou, established listed companies, or a new nā taku rourou ka ora ai te iwi - With your SME taking steps to implement it’s first 275 food basket and my food basket the people board to start exploring the export market, Chartered Fellows will thrive. of the IoD there is much that good governance can do to assist “New Zealand Inc.” grow in off- Ngā mihi shore markets. Kirsten (KP) Numbers correct as at 7 August 2017 6 | BoardRoom August/September 2017 Upfront APPOINTMENTS 10-11 The IoD congratulates the following members on these board appointments: April Chartered Fellow Ian Fitzgerald has been Dr Sally Davenport has been appointed 2018 appointed chair of Public Trust Board from as Commissioner of the Productivity September Commission At SKYCITY Auckland Chartered Fellow Margaret Devlin and Teresa Ciprian has been appointed onto the Chartered Member Brenden Hall have been Food Safety board SAVE THE DATE appointed to the Aurora board Caren Rangi has been reappointed on the Chartered Fellow Nigel Gould has been Charities Registration board appointed chair of the Tertiary Education Commission Dr Paul Hutchison has been appointed to the Medical Council of New Zealand board Chartered Member Roger Wallis is on the Takeovers Panel until 2018 Jack Matthews joins the board of Chorus. Chartered Member Carolyn Steele has Philip Ling joins the board of Stride Property been appointed to the board of Green Cross Health Anna Campbell joins the board of FAB Group Chartered Member Des Brennan has been NZX Corporate appointed to the board of Basketball Landcare Research has appointed Ngarimu Governance New Zealand Blair and Hon. Kate Wilkinson to its board Code 2017 Dame Therese Walsh has been appointed to Consistent and open reporting on the New Zealand Antarctic Institute board director remuneration helps build trust and confidence in corporate governance. We are pleased that the updated NZX Corporate Governance Code 2017 provides that director remuneration 2017 edition should be clearly disclosed and this should include a breakdown of Four Pillars of remuneration for committee Shortly members will receive their roles and for fees and benefits for own copy in the mail.
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