Submission on the Future of Business

MBIE has sought feedback on a discussion document that presents some early insights on the subject of the Future of Business for Aotearoa New Zealand. MBIE’s Long-term Insights Briefing aims to look at medium and long-term trends, risks and opportunities that could impact New Zealand society over the next 10 years and beyond and how we can respond.

In this year’s Long-term Insights Briefing (government departments are required to do every three years), MBIE has explored two trends: the growth of purpose-led business and the emerging use of blockchain technology.

We have focused our submission on issues raised by the discussion document that affect the governance of organisations and the role boards play in steering the direction of their organisations.

Boards and directors have a key role in shaping the future of business and delivering well-being for Aotearoa New Zealand and best practice governance has an important role to play as we ready ourselves for the future and the challenges it brings.

To enable our governance leadership potential to be fully harnessed, it needs to be underpinned by sufficient governance capability and skill. We, therefore, see a role for government to invest in governance as leadership by supporting the building of governance capability and an improved governance culture within Aotearoa New Zealand.

Looking to the future, we encourage organisations to deeply reflect on why they exist (their purpose) and be clear with their shareholders/ members and wider stakeholders on what types of value they intend creating. Best practice governance encourages organisations to embrace a long-term view and develop strategy that results in sustainable business.

To support this self-reflection process, we suggest it may be useful for boards to consider what the “best interests” of an organisation actually means, and whether or not it is useful to set this out in a more formal way so that an exchange can occur between the organisation, shareholders and broader stakeholders.

Within this context, we consider it may be useful to reframe the concept of being “purpose-led” to one where an organisation aims to achieve multiple environmental, social and financial/ investment outcomes, supported by best practice governance. Such an approach could be presented as an option for organisations to pick up on a voluntary basis as it could potentially provide competitive advantage.

We also highlight the need for directors and boards to ready themselves for new ways of doing business and technological change, whether it be in response to the use of blockchain or wider technology and digital transformation developments such as the Metaverse, or more generally.

To be able to steer their organisations through these changes, directors individually and boards collectively, will need to broaden their governance toolkit and upskill and embrace the ability to be responsive and adaptive.