Room the Top Five Issues for Directors in 2019
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2019 board DEC / JAN The top five issues for directors roomMagazine of the Institute of Directors in New Zealand in 2019 Now used by more than 2000 board directors throughout New Zealand and Australia Elegant and affordable software for SMEs and Not-for-Profits. START YOUR FREE TRIAL TODAY. www.boardprohub.com BoardPro-IOD-FullPage-V1.indd 2 29/10/18 5:04 PM CONTENTS A note from the editor This issue looks at what keeps directors awake at night, and what should be keeping directors awake at night. The Agenda Don’t panic, but there are a few things DEC / JAN 2019 you might like to think about. Our annual Director Sentiment Survey, conducted in association with INSIDE IoD the ASB, finds labour force capability and availability are top of mind. It also revealed BoardRoom details business confidence among directors is 01 down, reflecting a similar view across the 05 02 CEO letter business community. Confidence was near 10-year lows (almost as bad as just 03 UpFront after the GFC) in October, according to the NZIER. This is out of step with world 35 GLC update business confidence, as measured by the OECD, which is near 10-year highs. 45 Out and about Is business confidence little more than a political talking point or is it an indicator 48 Events of deep truths about an economy? ASB Chief Economist Nick Tuffley explores the issues for us in a thought-provoking TOP FIVE ISSUES FOR FEATURES opinion piece. DIRECTORS IN 2019 05 Top five issues for Looking forward to 2019, Felicity Caird directors in 2019 from the Governance Leadership Centre reviews the top five issues that are likely 09 Director Sentiment to confront boards in the new year – and Survey offers a few guidance points. Culture and 19 conduct, climate change, the future of 13 Weak business work, mental health and wellbeing in the confidence: should workplace, and appropriate compliance we worry? make up the five. These are issues on which boards need to ensure they get 15 Runs on the board the right information in order to make good decisions on strategy. 19 From old boys club Geoffrey Bowes, our first chief to professional body executive, gives a good-humoured FROM OLD BOYS CLUB Building a better board account of the establishment of the TO PROFESSIONAL BODY 23 Institute of Directors in New Zealand Geoffrey Bowes (left) gives Boards must lead change as an independent body, and the an insight into the early 25 establishment of a governance culture. days of IoD 29 Lexus LC500 review – As the organisation moves towards its Second date 30th anniversary next year it is timely to reflect on our beginnings and consider 38 Meet our Emerging what type of organisation members Directors will need in the future. 25 Aaron Watson FROM OUR PARTNERS BoardRoom editor 31 Natural disasters dominate risk thinking / Marsh 33 Taxing time for boards / KPMG BoardRoom is the magazine of the Institute of Directors BOARDS MUST LEAD in New Zealand iod.org.nz CHANGE Dec/Jan 2019 BOARDROOM BOARDROOM DETAILS boardroom SENIOR LEADERSHIP TEAM BOARDROOM IS PLEASED Chief Executive Officer TO ACKNOWLEDGE THE SUPPORT OF Kirsten Patterson BoardRoom is published six times NATIONAL PARTNERS a year by the Institute of Directors General Manager, Members in New Zealand (IoD) and is free Nikki Franklin to all members. Subscription for General Manager, Governance asb.co.nz Leadership Centre 0800 803 804 non-members is $155 per year. Felicity Caird BoardRoom is designed to inform General Manager, Corporate Services marsh.co.nz and stimulate discussion in the Chris Fox 0800 627 744 director community, but opinions expressed do not reflect IoD General Manager, Brand, Marketing and Communications policy unless explicitly stated. Sophi Rose NATIONAL SPONSORS Delivery Manager Robbie McDougall aurainfosec.com EDITOR 04 894 3755 Aaron Watson COUNCIL +64 4 470 2647 Liz Coutts – President [email protected] Alan Isaac – Vice President Dr Helen Anderson – Wellington Please contact the editor for any advertising queries. Des Hammond – Bay of Plenty kpmg.co.nz Julia Hoare – Auckland 09 367 5800 Jackie Lloyd – Wellington INSTITUTE OF DIRECTORS IN NEW ZEALAND (INC) Simon Lockwood – Waikato Mezzanine Floor, 50 Customhouse Quay Vincent Pooch – Canterbury PO Box 25253, Wellington 6146 Geoff Thomas – Otago Southland New Zealand Clayton Wakefield – Auckland minterellison.co.nz Tel: 04 499 0076 Sarah-Jane Weir – Nelson 09 353 9700 Fax: 04 499 9488 Marlborough [email protected] iod.org.nz COMMERCIAL BOARD The Institute of Directors has staff based at the Kirsten Patterson, Chair; National Office in Wellington, an office in Auckland Liz Coutts, Dr Alison Harrison, PRODUCTION NOTES and eight branches. For National Office, phone Alan Isaac Every effort has been made 04 499 0076. to guarantee the pages of this magazine are sustainably sourced and produced using BRANCH MANAGERS BOARDROOM IS PROUDLY DESIGNED BY paper that meets the environmental For a full list of branch managers, standards shown below. see page 48. eightyone.co.nz 04 894 1856 When you have finished with this magazine, please recycle. 1 Dec/Jan 2019 BOARDROOM CEO LETTER that directly affect business, What can business do to to harness the expertise of enhance services in rural the private sector to inform and provincial towns? government policy, and to build closer relationships How can government and between government and business work together business. The four priority to unleash the potential areas are: building tomorrow’s of New Zealand’s Agritech skills, accelerating our industry? KIRSTEN PATTERSON regions, attracting high quality How can government and CEO, INSTITUTE OF DIRECTORS investment and unleashing business work together our SMEs. to solve regional skills shortages? Questions the council is debating: The best spot in New Looking forward Zealand to spend the How can business summer holidays while practically demonstrate pondering the above. to turning 30 their commitment to (Oops, that may have been ensuring workers in New one of mine I added later…) Zealand are supported A milestone birthday is usually of your own about the year to gain new skills and We’d be interested in your a time to reflect, and the IoD passed, and the challenges transition into new jobs answers and ideas, and there is no different; in 2019 the and opportunities ahead as the nature of work are a number of IoD members IoD will celebrate 30 years. in 2019. We know that IoD changes? on the business council with Although there was previously members will be thinking whom we can share your a New Zealand branch of the about wider issues beyond How can business support comments and responses. UK IoD operating for a number just the individual firms the operationalising of Send your answers in to of years, it was in 1989 that they support. micro-crediting and the [email protected] IoD as we know it today was Results from the inaugural fees-free learning policy? The first five answers formed as an independent Global Network of Directors How can our tertiary received will receive a body. Institutes Survey showed institutions support this copy of a book of essays, During 2019 we will take New Zealand directors are in a practical way, learning The Big Questions – What the opportunity to reflect significantly more concerned from best-practice models is New Zealand’s Future? on governance over the past about social and economic overseas? A “birth date” of 1989 30 years and what the next 30 issues than their global peers. technically makes the IoD a years may hold, starting in this Eighty percent of New Zealand How can business support millennial, but I wonder how edition with an interview with directors identified housing SMEs and others within many would see us as the our first Executive Director/ as our most significant social the business community digitally-connected, socially- Chief Executive of the IoD, and economic issue compared to realise the opportunities minded, globally-focused, and Geoffrey Bowes. Respecting to only 34% globally. Poverty provided by R&D tax entrepreneurial typecast of and honouring our heritage and income inequality was credits? that generation? is an important part of rated second highest at 67% Much also for us to ensuring strong foundations contrasting with 45% globally. How can New Zealand contemplate as we lead into for the future. We are merely In the event that you have grow its base of investment the new year – for us a year the guardians of today and depleted your reading pile and capital and ensure Kiwi of digital transformation – we have all benefitted from you are looking for inspiration firms realise their potential? a new CRM, finance system, the foresight of the early for quiet reflection or to kick- How can NZ attract quality website and refreshed brand, IoD champions. As Warren off a debate at the summer foreign investment in a to ensure we remain relevant Buffet said: “Someone’s sitting BBQ, you might like to consider seamless way? to the needs of the governance in the shade today because the questions that the Prime community for the next someone planted a tree Minister’s Business Council Could the government’s 30 years. a long time ago.” will be contemplating. investment funds play As you’re sitting in the The purpose of the council a more prominent Ngā mihi, shade over the summer is to provide high-level free role in investing in NZ holidays, you will no doubt and frank advice to the infrastructure projects Kirsten (KP) be doing some reflecting Prime Minister on policies and businesses? 2 Dec/Jan 2019 BOARDROOM UPFRONT UpFront Director Q: When are directors required to keep board discussions and Vacancies information confidential? DirectorVacancies is a cost-effective way to reach our extensive A: Under section 145 of the Companies Act membership pool of director talent.