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GOVERNANCE AT MERCURY. LETTER FROM OUR CHAIR.
by Mercury
Dear Shareholder
It is my pleasure to present our corporate governance statement for the year ended 30 June 2023.
This corporate governance statement outlines Mercury’s Corporate Governance Framework, including information about the composition, characteristics and function of Mercury’s Board, the ways in which we ensure that we act ethically and responsibly at Mercury, our approach to risk, and inclusion and diversity.
FY23 has been another year of significant activity for Mercury and consequently for Mercury’s Board. This letter highlights some of that activity.
The Board has overseen: the advancement of Mercury’s generation development pipeline including approving investment decisions for the Kaiwera Downs wind farm and the expansion of the Ngā Tamariki geothermal power station; completion of the Turitea North and South projects; and delivery of the next phase of the Trustpower retail acquisition by the integration of the Mercury and Trustpower brands.
In May, Mercury committed to the new purpose that is showcased in our FY23 Integrated Report, Taking care of tomorrow; connecting people and place today, which further drives our long-term ambitions.
We have made significant progress with another of our strategic convictions which is how Mercury ensures it will be a great partner with iwi. This has included feedback from our iwi partners as to how they view their relationships with us, and reflection on who we are and what we stand for, with the objective of establishing some key principles to underpin how we approach our relationships with iwi, hapū, whānau and landowners.
Climate
In FY23, Mercury published climate related disclosure in accordance with the NZ climate standards, and updated its Climate Change Management Plan. In August 2023, Mercury is publishing its first Climate Transition Action Plan. This has involved aligning our climate scenarios with our strategic scenarios and has been an important focus for the Board, supported by the Risk Assurance and Audit Committee. During the year Mercury issued a further $150m green bonds to assist in financing projects and expenditure relating to renewable energy and other eligible projects. The bond issue was fully subscribed, and the strong response from the market demonstrates continued confidence in Mercury’s business performance and long term outlook.
Board Changes And Succession Planning
Last year highlighted the importance of Board succession planning. Susan Peterson and Lorraine Witten joined the Board on 1 September 2022. Andy Lark stepped down from the Board on 22 September 2022 after 8 years’ service. Dennis Barnes also stepped down from the Board on 16 May 2023 to take up a full-time executive role in Australia. We are grateful for Dennis and Andy’s contributions.
Patrick Strange will retire at the Annual Shareholders’ Meeting (ASM) this year after a total of 11 years of service. Patrick’s operational experience and deep industry knowledge has been invaluable to the continued progress of Mercury. His inputs into large projects, health and safety, and the development of robust risk management strategies have been deeply appreciated by the Board and management. On behalf of the Board, I would like to thank Patrick for his outstanding service to the Board and to Mercury.
Adrian Littlewood joined the Board on 1 August and Mark Binns will be joining the Board from 1 September. Adrian and Mark bring broad executive experience to the Mercury Board, including capital management, risk management, major project investment and large organisation leadership. Mark also has the deep operational experience in the energy industry previously provided by Patrick Strange and Dennis Barnes.
The appointment of Adrian and Mark in 2023, Susan and Lorraine in 2022, and Hannah in 2020, gives the Board refreshed perspectives and ensures the Mercury Board has a strong cohort of directors to take the business forward over the medium to longer term.
Mercury continues to take part in the Future Directors programme established by the Institute of Directors. The process for appointing the next “Future Director” is currently underway.
ANNUAL SHAREHOLDERS' MEETING
Our ASM will be held in a hybrid format again this year, with shareholders being able to join in person or remotely via video link. This approach was successful in 2022 and Mercury is aligned with the New Zealand Shareholders' Association’s principles of maximising meaningful shareholder participation and quality engagement. look forward to seeing you there.
