Inadequate housing and a growing tide of inequality are top of mind for directors both at home and abroad, a Global Network of Director Institutes survey shows.
Some 80 percent of the 375 New Zealand directors surveyed say housing is one of the major economic and social issues they’re concerned about. Sixty-seven percent are wrestling with issues of poverty and income inequality, according to the institutes’ first global director survey. Those issues are being considered worldwide, with the global survey showing 45 percent of directors are worried about poverty and inequality, and 34 percent see housing as a major issue.
New Zealand Institute of Directors chief executive Kirsten Patterson says things have moved on from the 1980s style short-term focus on share price, with boardrooms assessing a broader array of issues and stakeholder interests that drive the long-term value of an entity.
“The fact that these are global trends is indicating a significant market shift,” she told BusinessDesk.
While those issues were expected to be of concern among not-for-profit directors, Patterson said they were showing up strongly in the commercial environment as well.
The survey backs up recent steps across a number of forums. The NZX’s new governance code introduces principles on how to encompass non-financial measures, such as corporate social responsibility and environmental practices. The Institute of Directors’ remuneration report also found the growing complexity of the boardroom was demanding more time of directors.
Just this week, SkyCity Entertainment Group acknowledged that shift in its notice of annual meeting. The casino operator wants to increase the pool of fees for directors, largely to reflect the increased time and greater complexity facing the chair of the corporate social responsibility committee, currently Sue Suckling. Its annual report devotes 26 of 132 pages to corporate social responsibility.
Patterson said this changing paradigm for directors has also fed into how they select new appointments, typically using a skills matrix. It’s hard to determine whether increased boardroom diversity has accelerated the broader concerns or vice versa, she said.
New Zealand directors were by and large upbeat about the economy, with 51 percent confident in the growth prospects for their business, compared to 45 percent in the global survey.
Infrastructure was another concern for New Zealand directors at 56 percent. The cost of healthcare was seen as a key problem by 27 percent of respondents and tax and government spending by 21 percent of those surveyed.
New Zealand boards had slightly higher levels awareness of cyber risks relative to their global peers at 58 percent. They also identified big data and artificial intelligence as the top tech disruptions they’re facing, each at 55 percent.