This page contains a variety of resources for directors.
Audit quality – A director’s guide
This handbook is aimed at directors of FMC reporting entities. It sets out how you, as a director can contribute to the audit quality of your audit, as well as what you can expect from the FMA and your auditor.
Investor confidence is a key part of maintaining participation in successful financial markets. This confidence depends partly on investors having access to credible and reliable financial information. Audits of FMC reporting entities’ financial statements ensure this information complies with financial reporting standards and gives a true and fair view of the financial position of the business.
We recognise the vital role good corporate governance plays in contributing to markets that are fair, efficient and transparent, and to ensuring stakeholders’ interests are respected.
Appropriate processes and systems help to manage risks and allow those in governance roles to focus on growth, value creation and the long-term sustainability of their businesses.
The approach taken in this handbook recommends that boards provide sufficient meaningful information to show how they meet nine high-level principles:
Ethical standards: Directors should set high standards of ethical behaviour, model this behaviour and hold management accountable for delivering these standards throughout the organisation.
Board composition and performance: To ensure an effective board there should be a balance of independence, skills, knowledge, experience and perspectives.
Board committees: The board should use committees where this will enhance its effectiveness in key areas, while still retaining board responsibility.
Reporting and disclosure: The board should demand integrity in financial reporting and in the timeliness and balance of corporate disclosures.
Remuneration: The remuneration of directors and executives should be transparent, fair and reasonable.
Risk management: Directors should have a sound understanding of the key risks faced by the business, and should regularly verify there are appropriate processes to identify and manage these.
Auditors: The board should ensure the quality and independence of the external audit process.
Shareholder relations and stakeholder interests: The board should respect the rights of shareholders, and foster constructive relationships with shareholders and stakeholders. Shareholders should be encouraged to engage with the entity.
This joint publication with the Institute of Directors is intended to provide company directors and prospective directors with a quick reference and overview of some of the key things they should think about. It outlines some of the legal requirements, ethical considerations and best practice areas for directors to consider, to be effective in their role. It is not intended to be comprehensive and includes links to more detailed resources.
The number of companies looking to access the equity markets continues to grow. This guide is intended to help directors assess whether going public is the right choice for their company and provide an insight into the process of becoming a public company. It is not a comprehensive account of the legal obligations of directors during an initial public offering (IPO). Your professional advisers can help you understand those details.