Governance Risk Score (GRS)

• director_appointments + director_skills
  Board size, independence ratio, average tenure, skill-matrix breadth, IoD-NZ designation count.
• audit_history
  Auditor identity (Big-Four vs other), opinion type, going-concern flags, audit-firm tenure.
• top_20_shareholders + substantial_shareholders
  Concentration of ownership, presence of related-party blocks, free float.
• remuneration_history + executive_compensation
  Disclosure completeness, pay-mix transparency, CEO multiple to median NZX peer.
• announcements (continuous disclosure)
  Continuous-disclosure cadence, late-filing flags, NZX RegCo investigation history.

Source code: lib/governance-risk.ts (and the governance_risk_scores_v2 table)

• Excellent (80+)
  Strong on all five dimensions; few or no known governance flags.
• Very Good (70+)
  Strong on most dimensions; limited gaps in one area.
• Good (60+)
  Adequate on most dimensions; one or two areas with material gaps.
• Adequate (50+)
  Mixed signal across dimensions; warrants closer reading.
• Poor (40+)
  Material gaps in multiple dimensions; specific flags will be visible on the issuer profile.
• Very Poor (<40)
  Multiple material gaps; recommend reading the underlying disclosure flags directly.

• Per the IR Memos load-bearing rule, NZXplorer scores (including GRS) are prompt INPUTS to AI-generated memo content, never cited OUTPUTS in memo prose. The score appears in clearly-labelled internal-review sidebars only.
• The GRS does not flag individual directors. It is an issuer-level composite. Director-level concerns surface separately through the underlying tables (board independence, tenure flag, etc.).
• Banding language in user-facing copy must use the descriptive labels above, never raw numerical comparisons that imply ranking (avoid “the worst NZX-listed issuer for governance” framing).

These are the known limits of the methodology. We disclose them publicly so readers can weigh the observation in context, and so that any qualified-privilege defence under the Defamation Act 1992 §16(2) rests on demonstrably fair and accurate reporting.

• Peer-relative scoring means a low GRS in a strong-cohort year does not necessarily mean weak absolute governance; conversely a high GRS in a weak-cohort year is no guarantee.
• Governance disclosures lag actual practice. A board change made in March may not surface until the annual report in October.
• The five-dimension framework reflects our editorial judgement on what matters; alternative governance frameworks (ICGN, ASX-aligned, etc.) would produce different rankings.
• Some dimensions rely on extracted data (board independence often requires reading a director bio); extraction errors propagate into the score.
• New listings have limited history and are scored conservatively; long-tenured issuers have richer data and can score either higher or lower.
• The GRS is not a credit rating, an investment recommendation, or a fitness-for-purpose assessment. It is a comparative governance-disclosure signal.