Research Handbook on Directors’ Duties
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Research Handbook on Directors’ Duties

Edited by Adolfo Paolini

Directors’ duties and liabilities have become the centre of a general legal discussion following the 2008 financial scandal that resulted in global recession. Questions have arisen regarding the ways in which the directors of the world’s major financial institutions have handled their duties and how their decisions have impacted investors, shareholders and consumers. This detailed Handbook discusses the nature of the relationship between a company and its directors, assessing issues such as how duties are discharged, liabilities that may arise and what interests directors should consider before embarking on commercial ventures.
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Chapter 4: Almost codified almost 20 years on: the effect of the Companies Act 1993 on the development of directors’ duties in New Zealand

Susan Watson


The New Zealand Companies Act 1993 arose out of a lengthy law reform process given its conceptual grunt by the work of the Law Commission. Despite the inevitable tinkering by parliamentarians and the ubiquitous drafts people, the final version of the Act remained broadly similar to the Law Commission draft. One of the most interesting features of the Act is that it was an early attempt to codify directors’ duties; other jurisdictions have since set down common law duties into legislation so the New Zealand experience in the almost 20 years since the Act came into force provides an interesting case study of the consequences of crystallising somewhat ephemeral common law duties into statutory form. The first objective of the Companies Act 1993, set out in its long title, is to reaffirm the value of the company as a means of achieving economic and social benefits through the aggregation of capital for productive purposes, the spreading of economic risk, and the taking of business risks. Appropriate legislative controls on the operation of companies are key to their continuing viability and key to governments around the world continuing to permit businesses to be operated in that form.

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