Friday 26th July 2019
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Trustpower is reviewing its processes to ensure it has the appropriate checks and balances to make sure the company's conduct and culture is as strong as the board thinks it is.
Chair Paul Ridley-Smith told shareholders at today's annual meeting in Mt Maunganui that ANZ Bank New Zealand's recent issues, where disputed expense claims by former chief executive David Hisco led to his early exit, is a reminder that the board and management's role is to spend and invest shareholders money as best they can.
Conduct and culture go beyond simply monitoring expenses, encompassing the company's social licence, that it operates within the law, honours contracts, and treats customers and staff fairly, he said.
"I have every confidence that Trustpower deserves your full trust. Vince and his senior team work hard on creating a positive culture at Trustpower and that is the surest way to avoid adverse conduct issues," Ridley-Smith said, referring to chief executive Vince Hawksworth.
"But it’s also important to have appropriate checks, balances and policies and we’re reviewing these to make sure that we’re doing as well as we can."
Ridley-Smith said he expects the company can lift its game because social and business standards and expectations are changing. For example, Trustpower's hydro generation will always leave an environmental footprint, and communities need to understand it's a two-way street in providing renewable energy, he said.
New Zealand needs to build more renewable generation, but will have to keep mining and using natural gas, "because especially wind and solar (which are intermittent by nature) need to partner with an on-demand energy source to give users the confidence to electrify their processes", he said.
Ridley-Smith said the company will continue to lobby for natural gas having an important role in the nation's energy mix "because it will help us reduce carbon emissions on a net basis both in New Zealand and globally."
The Interim Climate Change Committee's report to government, released last week, showed gas-fired generation will need to be kept in the system for longer to support greater electrification of transport and industry.
While Trustpower is at odds with the government over gas, Ridley-Smith said the planned overhaul of the Resource Management Act is good news, and that the company supports and will positively engage in the review.
Similarly, it will continue to advocate for the emissions trading scheme, which Ridley-Smith said was the surest way to signal to consumers that they need to move to more renewable energy sources or change processes to cut energy use.
"Trustpower has, and will continue, to lobby for resource management and planning law changes that make it simpler and faster to renew consents on existing renewable generation and build more," he said.
"Governments often think about what schemes and subsidies they can provide to get desired outcomes. Often the solution is much simpler – just change or remove the laws that make it hard for things to happen."
Trustpower shares last traded at $7.48, and have gained 24 percent so far this year.
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