My posts provide resources and commentary on a range of issues of governance, finance, accounting and public policy.
A posts index is here (for smartphone layouts that don’t display it in the sidebar).
In New Zealand, there are over 2,600 ministerial appointments to more than 400 boards, and they are administered by around 20 different agencies on behalf of the various responsible ministers.
The following lists (updated as at February 2017) provide some useful links if you are interested in state sector board appointments.
Corporate governance codes, guidelines and rules generally assert that a significant proportion (and in some cases, all) of the directors of a company should be “independent directors”. But what exactly does it mean to be an “independent director”? Continue reading “Independent directors”
This post sets out some background resources on state sector board governance. Continue reading “State sector board governance”
This post explains the state-owned enterprise (SOE) governance and accountability framework in some more detail than my posts on state sector board governance (which noted that SOEs operate under a different legal framework from Crown entities in New Zealand) and on Crown companies (which noted that SOEs are just one category of company owned by the Crown). It emphasises the features of SOEs that distinguish them from privately-owned companies.
The Crown owns many other companies in addition to the 11 active state-owned enterprises (SOEs) referred to in my post on the distinctions between SOE companies and privately-owned companies. They are described below, with links to the distinguishing elements of their respective governance frameworks.
Long-serving directors bring a number of benefits to boards: they provide stability; they “know the business”; they are a repository of institutional memory; they will tend to have more governance experience generally, not just with this firm; they are more likely to attend, and to contribute to, board meetings and board committees; and their skills, abilities and contribution to the governance of the entity are known, tried and tested. But how long is too long? Continue reading “Director tenure and board reappointments”
When we created the New Zealand Superannuation Fund, following the Labour Government coming into power in 1999, the concept was fairly simple: set aside surpluses from the “golden years” of the next decade or so and invest them efficiently so that funds are available to ease the budget adjustment a couple of decades later as fiscal pressures from population ageing and other factors rapidly started to bite. Continue reading “Political scenarios for the New Zealand Superannuation Fund”
The Institute of Directors in New Zealand has published a Practice Guide on recognising, declaring and managing conflicts of interest. It provides an overview of how directors should recognise and manage conflicts of interest in the boardroom, using an “identify-declare-manage” framework.
This post sets out some other aspects of the broader context of conflicts of interest, not directly addressed in the Practice Guide, that directors should also have on their radar. Continue reading “Conflicts of interest — the broader context”
Is my nest egg big enough to give me the sustainable income I will want in retirement? And where should I invest it once I retire? Continue reading “Risk and retirement income”
The board’s fundamental role is to act in the best interests of the company and, in particular, to govern the company so that it creates and adds value. This requires a governance culture that leads the company to identify and take advantage of change as its business environment continuously evolves. That culture also needs to be able to actively and productively challenge and hold management to account, and to ensure effective compliance. This requires a board of individual directors who, between them, can make a variety of different contributions while working together to direct the company. That is how diversity contributes to board performance. Continue reading “Diversity and board performance”
This post draws out what constitutes “good governance” in the context of a company and its board of directors.
This post shares some resources on the New Zealand Superannuation Fund. Continue reading “New Zealand Superannuation Fund”
Racetrack betting has close parallels with investing on financial markets and provides a relevant context for investigating attitudes to risk and the informational efficiency of markets. Differences in market prices (odds offered) across different markets (win, show, place, quinella, different bookmakers) whose payout (dividend) depends on the same risky outcome (a horse race) raise the prospect of arbitrage opportunities. Continue reading “Financial economics of racetrack betting”
This post provides links to a range of papers and presentations I have produced over time on pensions, savings and capital markets: Continue reading “Pensions, savings and capital markets”
Earnings management is the practice of intentionally influencing a firm’s financial reporting choices to reflect a particular view of the firm’s performance. Continue reading “Earnings management”
Portfolio performance depends crucially on the behaviour of returns on the assets held in the portfolio. However, there is some misunderstanding in practice about the econometric relationships involved. Continue reading “Geometric return and portfolio analysis”
I was originally attracted to The Treasury by the significant programme of reforms of financial management in the New Zealand public sector that were being implemented in the early 1990s. Continue reading “Financial management reform in the New Zealand public sector”