Z Energy pushes for broader company reporting in NZX governance review

Friday 15th January 2016

Z Energy, the petrol station chain seeking to takeover rival Chevron New Zealand's brands, wants more indepth company reporting on non-financial measures including workplace safety, and more fulsome executive pay disclosure, which would bring the local market's obligations in line with Australia.

In a Dec. 17 submission to the NZX's review of corporate governance reporting requirements, Z called for "significant change" in non-financial reporting measures, which it claims would give investors a better idea of how the Wellington-based company generates long-term value. The petrol retailer also wants greater disclosure in senior executive remuneration and company specific health and safety performance.

"Z's view is that investors and stakeholders should have visibility into all material risks facing a company, including non-financial risks, and issuers should also be required to disclose how they manage or intend to manage such risks," the company said. "Z supports a recommendation that issuers specifically report on material economic, environment and social sustainability (or ESG) risks," it said, referring to environmental, social and corporate governance.

Last November, stock market operator NZX sought feedback on proposals to broaden corporate governance rules for listed companies, ahead of a wider review of listing rules set for this year. NZX wants to bring governance requirements into line with best practice, and is looking at the Financial Markets Authority corporate governance principles and guidelines handbook published in December 2014 and those that apply to ASX-listed companies.

Z said the local stock exchange is well placed to improve the quality of ESG reporting, which is "increasingly becoming a part of the investment decision-making process) and suggested the NZX Code should recommend issuers report in relation to corporate social responsibility and sustainability.

That would put their financial performance in a wider social and environmental context, provide a picture of the social value it generates, explain how they generate value in the short-, medium-, and long-term, increase accountability on their non-financial impact, and provide investors with information to assess a company's longer term prospects.

Z also said there was a "significant gap" in the reporting regime over risk management, and would benefit with the inclusion of how firms identify and manage risks to their business.

"Disclosure should only be required for areas of material risk and issuers should have the right to refrain from disclosing details of risk management controls that may be commercially sensitive in nature," Z said.

The company's shares rose 1.6 percent to $6.41, and have dropped 6.1 percent this year.

BusinessDesk.co.nz

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