Prime Minister from 1997 to 1999, she heads the board of Genesis, one of four state-owned energy companies which the Government has slated for a partial float on the New Zealand stock exchange.
Mighty River Power is set down to be floated before June and expectations are that either Genesis or Meridian Energy will follow in the second half of this year.
Shipley has been chair of Genesis since 2009 and was appointed by the National-led Government to lead the company into its partial privatisation.
John Hawkins, chief executive of the Shareholders Association, said that on the face of it Shipley's situation was "not a good look". But he said more information was needed on the Mainzeal collapse before any decisions could be made. "We are in something of an information void."
Hawkins said he believed politicians were not governance experts, they were policy experts.
"People who are investing on the basis of names should think about that - we always advise peopleto look at a board's experiencebefore they invest."
Hawkins said boards were looking harder at the skill sets they needed and how that matched up with their directors.
"If you have a significant failure it just sets yourself up to be looked at a little more closely. If boards don't do that investors will."
Market commentator Arthur Lim said the situation was a "red flag" for investors and he expected the Government's advisers to raise the issue.
Lim said typically companies that went to initial public offering came on to the market in as pristine a condition as possible to enable sellers to get the best possible price.
Any concerns for investors could result in the Government not realising as much money as it hopes to from the partial sell-down. Lim said investors often bought into a company based on the track record of its directors and New Zealand did not have a good history with politicians on boards of public companies.
"It's currently hard to find a publicly listed company with a politician on it which has produced a good result for shareholders."
Labour's SOE spokesman, Clayton Cosgrove, said questions needed to be asked about Shipley's suitability to remain as chair of Genesis.
But he said receivers PwC needed to find out how Mainzeal collapsed first.
Cosgrove said that so far there had been no explanation of why the company failed and what the directors knew.
"Those are facts which should be placed on the table. You can't justify making a call without information, the problem is we have no facts."
He said the issue was another uncertainty for investors.
A spokesman for Jenny Shipley said she was not in a position to comment at this stage.
