Extract

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.