Last week Contact announced a raft of constitutional changes to entrench existing practices and formalise the independence of the board. The proposed changes include 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.

Standard & Poors recently said these measures would formalise existing practices and bring forward compliance with the expected updated New Zealand Stock Exchange listing rules. This would strengthen the existing insulation of Contact Energy from any action taken by (51% owner of Contact Energy) United States-based Edison Mission.

As such, these measures were considered prudent and if adopted, then Contact Energy "would be removed from Credit Watch and the current ratings (BBB+/A-2) affirmed", said Standard & Poors.

Contact Energy shareholders will vote on the proposals at the company's annual meeting in Wellington next February 11.