CA ANZ welcomes the opportunity to provide a submission to NZX’s recent consultation on director independence. 

As outlined by the Companies Act 1993, a director must act honestly, in the best interests of the company, and with reasonable care at all times. This duty applies to all directors, regardless of independence. We point to the New Zealand Institute of Chartered Accountants Code of Ethics, which may be useful for NZX to consider as this provides guidance on independence.

In our view, independence is just one of many important factors that results in an effective board and suggest that insights from diverse perspectives can sometimes be as valuable a factor as independence. We recommend a minimum standard of independence be set by NZX and applied to all categories of issuer. 

We note that New Zealand’s director pool is not wide and recommend that any rules for director independence should not increase unnecessary barriers for businesses to fill their boards with the skills and experience they require.