NZX Governance Explorer

Methodology

Understanding how we collect, process, and present NZX governance data

Data Sources

All data in the NZX Governance Explorer is sourced directly from official NZX market announcements and company disclosures. We focus specifically on:

  • Annual General Meeting (AGM) notices and results announcements
  • Special meeting resolutions and outcomes
  • Director election and re-election voting data
  • Remuneration report approvals
  • Auditor appointments and remuneration
  • Share buyback authorizations
  • Constitution amendments

Each data point includes a link back to the original NZX PDF announcement, ensuring full transparency and traceability.

Data Extraction Approach

We use an advanced AI-powered pipeline to extract structured data from AGM PDFs:

PDF Parsing
AGM documents are processed to extract meeting metadata, resolution details, and voting outcomes
Structured Data Generation
LLM models transform unstructured PDF content into consistent JSON data with resolution titles, types, vote counts, and percentages
Quality Assurance
Multiple validation checks ensure data accuracy, including vote total verification and percentage calculations
Database Integration
Validated data is stored in a relational database optimized for quick querying and analysis

"Pay for Failure" Detection

Our "Pay for Failure" detection system identifies instances where director compensation increased while company performance declined. This promotes transparency and accountability in director remuneration.

Red Flag Tiers
🔴 CRITICAL:Director compensation increased by >10% year-over-year AND stock price declined by >10%, OR revenue declined by >10%, OR net profit declined by >15%
🟠 WARNING:Director compensation increased by >10% year-over-year AND stock price performance was flat or slightly negative (-5% to +5%)
🟡 CAUTION:Director compensation growth significantly outpaced stock price performance (pay increased more than 2x stock return)
Calculation Methodology
  • Stock performance measured for NZX financial year (July 1 - June 30)
  • Director fees compared year-over-year from director remuneration disclosures
  • Revenue and profit changes calculated from financial statements
  • Partial year appointments flagged with context notes (e.g., mid-year joins)
Important Context
  • Directors joining mid-year will show large percentage increases in their first full year
  • Large compensation changes may reflect changes in committee roles or chair positions
  • Analysis does not account for broader market downturns or industry-specific challenges
  • Data availability limited to companies with director remuneration and stock price data
Purpose

"Pay for failure" erodes shareholder trust and indicates poor board oversight. Directors should be accountable for company performance, and compensation should align with shareholder returns. This analysis helps investors identify potential governance issues and hold boards accountable.

This is for transparency and accountability purposes only - not financial advice. See our full Pay for Failure Hall of Shame for detailed findings.

"Shareholder Heroes" Recognition

Our "Shareholder Heroes" recognition system identifies directors who demonstrated pay restraint and shareholder alignment when their companies performed strongly. This is the opposite of "pay for failure" - recognizing positive examples of governance.

Recognition Tiers
🟢 EXEMPLARY:Stock price up >20% year-over-year AND director compensation stayed flat or decreased (showing exceptional restraint when pay increases could have been justified)
🔵 COMMENDABLE:Stock price up >15% year-over-year AND director compensation increased <5% (minimal increase despite strong shareholder returns)
🟡 ALIGNED:Stock performance positive AND compensation growth was less than half of stock returns (good alignment between pay and performance)
Recognition Methodology
  • Stock performance measured for NZX financial year (July 1 - June 30)
  • Director fees compared year-over-year from director remuneration disclosures
  • Only positive stock returns considered (must have company success to show restraint)
  • Recognizes voluntary restraint when larger increases could have been justified
Important Context
  • Pay decreases may reflect stepping down from chair or committee roles
  • Analysis does not account for peer benchmarking or industry compensation norms
  • Recognition is relative to stock performance, not absolute compensation levels
  • Data availability limited to companies with director remuneration and stock price data
Purpose

"Shareholder Heroes" set positive examples of director stewardship by prioritizing long-term value creation over maximizing personal compensation. Recognizing these directors encourages better governance practices across NZX boards.

This is for transparency and recognition purposes only - not financial advice. See our full Shareholder Heroes Hall of Fame for detailed findings.

Limitations & Caveats

While we strive for comprehensive and accurate coverage, users should be aware of the following limitations:

Historical Coverage
Data availability is dependent on the digital accessibility of NZX announcements. Older meetings may have limited or missing data.
Extraction Accuracy
While our AI extraction pipeline is highly accurate, complex PDF layouts or unusual formatting may occasionally result in parsing errors. Always verify critical data against source documents.
Scope
Currently focused on AGM and special meeting resolutions. Other governance events and disclosures may not be included.
Real-time Updates
Data is refreshed periodically as new announcements are published. There may be a delay between announcement and availability in the system.

Future Enhancements

We are continuously improving the NZX Governance Explorer. Planned enhancements include:

  • NZXplorer Governance Risk Score (GRS): A composite metric that evaluates issuer governance quality based on voting patterns, board composition, and remuneration practices
  • Comparative Analytics: Tools to benchmark governance metrics across sectors and peer groups
  • Trend Analysis: Enhanced visualizations showing governance trends over time
  • API Access: Programmatic access to governance data for institutional investors and researchers
  • Export Capabilities: Advanced export options for custom reports and analysis

Contact & Feedback

We welcome feedback, questions, and suggestions for improving the NZX Governance Explorer.

For inquiries or to report data issues, please visit nzxplorer.co.nz