INTOUCH : Kiwis tops in corporate ethics

New Zealand has ranked number one in the world for auditing, corporate ethics and shareholder protection in Global Competitiveness Report, recently released by the World Economic Forum.
In the survey of 113 indicators of competitiveness, New Zealand advanced four places overall to number 20 on the list of 113 nations and it was the only nation to improve its score on the previous year.
It’s the second global survey in which the local business environment has ranked highly – it was recently rated as the second easiest country in which to do business in World Bank Survey, notes NZ Institute of Chartered Accountants’ director, government relations Steven Bailey. That we made the top 20 in the WEF report is, he says, “reflection of the professionalism and leadership of our business community”.
Out of the 113 indicators, New Zealand maintained or improved its ranking in 85, ranking second overall on the efficiency of corporate boards, fifth on public institutions and first on private institutions. Overall, the environment was seen as conducive to business, supported by efficient goods and labour markets, and was ranked third for the soundest financial systems in the world.
However, the country falls short in such areas as the extent and effect of our taxation and in an infrastructure in need of upgrading, says Bailey.
“The report signals to the Government our strengths and weaknesses compared to other countries… There are number of initiatives the Government needs to put in place to maintain our reputation, attract investment and implement reform in the small business environment, particularly with taxation issues.”
New Zealand was second only to Singapore in the World Bank Survey – ranking we’ve enjoyed for the fourth year in row. The top 10 also included Hong Kong, the US, the UK, Denmark, Ireland, Canada, Australia and Norway – the same countries that featured last year.
The survey ranks 183 countries based on 10 indicators that measure the time and cost of government requirements in starting, operating and closing business, trading across borders and paying taxes.
In other words, New Zealand is good place to do business – “the political environment is relatively stable, property rights are well protected, contracts enforced, and corruption in government is not an issue investors need be concerned with”, says Bailey.
However, he adds the report also needs to be examined in wider context given the bulk of Kiwi businesses employ five or fewer people, whereas the survey is based on organisations employing 60 or more, so doesn’t reflect the compliance costs faced by many small businesses.