NZSA Policy No 18 – Independent Directors Share Ownership 

NZSA Policy No 18 – Independent Directors Share Ownership 

Application:  This policy applies to all NZX listed companies. 

Purpose: NZSA maintains a range of policies to moderate the behaviour of all participants in the NZX listed company sector. These policies should be read in the context of the NZSA Policy Framework Statement. 


1.0  Commentary 

1.1 There is a wide range of opinion around Independent Directors owning shares from their holding no shares in order to preserve their independence and not be influenced by their financial stake in the company, to Directors owning shares based on their Fees. 

1.2 Some companies require Independent Directors to utilise part of their fees to purchase shares each year on the basis that this gives them “skin in the game” and aligns their interests with shareholders. 

1.3 In addition, with younger Directors being appointed it maybe that their personal financial situation doesn’t not allow them to purchase a substantial volume of shares. 


2.0  NZSA Position 

2.1 The Associations view is that whilst it is preferable for Independent Directors to hold some shares it should not be mandatory and individual Directors should be free to decide whether they hold shares and if so, how many according to their personal financial position. 



The definition of Independence is given in the NZX Listing rules under 2.13.3 (f). 


Related Policies 

NZSA maintains other related policies regarding audit as shown below:  

Policy 2 Auditor Rotation (hyperlinks) 

Policy 3 Auditor Tenure (hyperlinks) 


Document Control 

This document was approved by the NZSA Board: July 2018  (MAY 2019 I think TH) 

This document is effective from: July 2018 

The next planned review date is: July 2021