Contact revamp board

New Zealand power company Contact Energy has announced a raft of constitutional changes to entrench existing practices and formalise the independence of the board.

Chairman Phil Pryke said today that the proposed changes regarded the appointment of a minimum number of independent directors to the company's board, ensuring a majority of independent directors on the board's audit committee, and the required approval of dividends by an independent director before distribution.

The proposals accompanied the adoption by the board of a new board audit charter, explicitly establishing the role and obligations of the company's auditors.

"Although Contact Energy is majority-owned by Edison Mission Energy, the company's shares are held by more than 110,000 other shareholders, the majority of whom are New Zealanders

With these enhancements, the board is confirming its continuing commitment to good corporate governance and to protecting the rights of all shareholders," said Pryke from Wellington.

Half Contact's current six-member board, including Pryke, are independent directors, though there is no requirement in the company's existing constitution for any particular level of independent representation. It was proposed to include at least two independent directors or more if the board was enlarged.

The New Zealand Stock Exchange has endorsed the proposed changes. Chief executive Mark Weldon said it was especially pleased, given the fact that Contact was one of the exchange's largest listed issuers, that the company had moved to institute the regime earlier than required under NZSE rules.

The NZSE will be revising its listing rules early in 2003, requiring increased corporate governance for all issuers.

Contact shareholders will be asked to vote on the proposals at the company's annual meeting next February 11.