Magazine article New Zealand Management

Same but Different: Serving on Australian and New Zealand Boards

Magazine article New Zealand Management

Same but Different: Serving on Australian and New Zealand Boards

Article excerpt

Governance standards are now substantially set by international conventions. The roles and responsibilities of directors are reinforced by regulators such as the Securities Commission in New Zealand and ASIC in Australia. Sarbanes-Oxley, the requirements of the SEC in the US, governance standard guidelines from exchanges, and organisations such as the Institute of Directors here in New Zealand, all contribute to a now widely understood standard of board governance requirements.

This means that differences between Australian and New Zealand boards are more a consequence of scale and emphasis than any fundamental difference in the two approaches.

What have I learnt from serving on Westpac boards on both sides of the Tasman? The scale factor needs little explanation. Australia is four times larger than New Zealand, has many more large corporate entities and a number of those are truly international.

In Australia emphasis was placed on:

* The process of director induction, which was extensive and without any boundaries.

* A level of open engagement that I had not experienced previously.

* Governance is seen as an essential benchmark and guides behaviours and process in all decision making and is subject to very transparent measurement through international independent ratings assessment.

* There is a very high level of commitment and determination to be successful through maintaining a sustainable business for the long term.

* Integrity and fair judgement are values that are imbued in the culture both organisationally and for the bank's 27,000 employees.

* There is an externally resourced and rigorous annual review of director performance.

New Zealand and Australia value their independence and sovereignty. And while that should never be challenged, there are advantages in pursuing--with an open mind--those objectives that can be attained more quickly and to better effect by working together.

CER has worked well and the initiatives to better align the regulatory structures between the two countries must be encouraged.

The consequence of companies operating in both countries is that boards will necessarily comprise representatives from both and given that business breaks down barriers more quickly that politicians, there is a strong case for directors to embrace the opportunity for all of the stakeholders they represent. …

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