14 Jun 2017

Millennials investors likely to rock the boat

6:12 am on 14 June 2017

Millennial investors will increasingly flex their muscles to influence the way companies and their boards operate, according to a new report by Chapman Tripp.

Man with laptop

High house prices are expected to encourage investment in listed companies by younger New Zealanders. Photo: 123RF

The law firm said shareholder activism was on the rise in New Zealand. It expected that trend to continue and, thanks to the growth of KiwiSaver and the rampant housing market, it would more likely be millennial investors rocking the boat.

"Millennials who don't think they'll be able to purchase a house any time soon are instead to invest their money.

"That means that people are more likely to be taking an interest in an investment earlier than they might have been in previous generations," Chapman Tripp partner Geof Shirtcliffe said.

Mr Shirtcliffe said although New Zealand investors were not as active as shareholders in the United States or Britain, recent examples highlighted how the culture was changing.

That included shareholders in Rakon defeating a resolution to reappoint a director who was member of the company's founding family, and successful manoeuvring by Augusta Capital and institutional shareholders to vote down a proposal by NPY to replace three of its four directors.

Digital-savvy younger investors were also changing the way companies interacted with their shareholders, with more offering online meetings and voting.

The findings are in Chapman Tripp's first report on corporate governance in New Zealand, which looked at how well the top 75 listed companies were doing when it came to gender diversity, accountability and engaging with activist shareholders.

It found 23 percent of the top 75 listed companies had no women directors, while only one, Chorus, had a woman chief executive.

New Zealand companies still had a way to go to get more women around the board table, Mr Shirtcliffe said.

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