NEW ZEALAND Law and Practice Contributed by: Graeme Quigley, Ashton Goatley and Erin Hickey, Webb Henderson
ship of organisational culture and set the “tone from the top” , as part of their wider responsibility for risk management. The Financial Sector (Climate-Related Disclo - sures and Other Matters) Amendment Act 2021 makes specified disclosures concerning climate change and emissions governance, strategy, risk management and metrics/targets mandatory for a range of financial institutions (including large, listed entities) for financial years commencing from 1 January 2023 onwards. The Listing Rules require listed issuers to report the gender balance of their directors and offic - ers, along with a performance review of the issuer’s diversity policy. 3. Management of the Company 3.1 Bodies or Functions Involved in Governance and Management The principal bodies or functions involved in the governance and management of a company are its shareholders, its board of directors, and the company’s management team, if it has one. (It is common for boards of directors to appoint senior employees to management positions and delegate the necessary authority for managing the day-to-day affairs of the business to those senior employees – see 3.2 Decisions Made by Particular Bodies .) 3.2 Decisions Made by Particular Bodies Under the Companies Act, shareholder approval is required for certain significant matters such as adopting or altering the constitution, approving an amalgamation of the company with one or more other companies, commencing a volun - tary liquidation, and “major transactions” . Major transactions under the Companies Act are, in
broad terms, those in which the company pro - poses to acquire or dispose of assets, rights or interests (or incur obligations or liabilities) – the value of which is more than half the value of the company’s assets immediately prior to the trans - action. The company law reforms referred to in 2.1 Hot Topics in Corporate Governance are expected to include clarification that straightfor - ward transactions affecting share capital (such as the issue of new shares for cash), for which the Companies Act contains separate approval regimes, are not “major transactions” . In addition, for NZX-listed entities, the Listing Rules require shareholder approval for material transactions with related parties and some cat - egories of major transactions. NZX’s Major and Related Party Transactions Guidance Note was recently updated, including to reflect a policy shift on the part of NZX such that waivers from the relevant Listing Rules are now likely to be more difficult to obtain (the focus is on preserv - ing shareholders’ rights to vote on such trans - actions). Other decisions are left to the board. The board may delegate its powers to a director, a commit - tee of directors, an employee or any other per - son – although the board remains responsible for monitoring the decisions made by its delegate. There are, however, some powers that may not be delegated by the board. These are set out in Schedule 2 to the Companies Act and include issuing new shares, authorising dividends or other distributions, and acquiring the company’s own shares. 3.3 Decision-Making Processes A shareholder resolution may be passed at a shareholders’ meeting (see 5.3 Shareholder Meetings ) or by written resolution.
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