PhD FCA GAICD
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”
Following up from my post on state sector board appointments, this post sets out some background resources on state sector board governance.
My post on state sector board governance noted that state owned enterprises (SOEs) operated under a different legal framework from Crown entities in New Zealand, and my post on Crown companies noted that SOEs are just one category of company owned by the Crown. This post explains the SOE governance and accountability framework in some more detail, with a particular emphasis on the features of SOEs that distinguish them from privately-owned companies.
My post on the distinctions between State Owned Enterprise (SOE) companies and privately-owned companies referred to the 11 active SOEs. The Crown owns many other companies in addition to these SOEs. They are set out 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”
With the Retirement Commissioner’s triennial review of retirement income policy now under way, and publication of its terms of reference, here is a factoid about baby boomers and the ageing population to be alert to as we think about the issues. Continue reading “Baby boomers and the ageing population”
The Institute of Directors in New Zealand last year 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”
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 January 2016 from my original 2014 post) provide some useful links if you are interested in board appointments:
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’ve now had a personal web presence for twenty years, starting with a personal web page as a doctoral student at the University of Washington in 1994. This WordPress site is my latest reincarnation.
