Submission on the Companies (Directors Duties) Amendment Bill

The closing date for submissions on the Companies (Directors Duties) Amendment Bill has been extended to 17 Jan 2023. Find out more about making a submission.

The IoD has submitted on the Companies (Directors Duties) Amendment Bill (the Bill). 

The Bill proposes to clarify by an amendment to the Companies Act, that a company director, in acting as the mind and will of the company, can take actions that take into account wider matters other than the financial bottom-line. This may include matters such as the principles of te Tiriti, environmental impacts, good corporate ethics, being a good employer, and the interests of the wider community.

We welcome the focus on the importance of corporate governance in achieving outcomes for shareholders, stakeholders and the wider community. While supportive of the Bill’s intentions, we conclude there are other options that may better address the Bill’s objectives:

• The IoD takes no position on whether the amendments in the Bill should be pursued.
• Directors would benefit from more guidance in this area, achieved either through amendments to the Bill, or a range of other mechanisms.
• If the Select Committee concludes that legislative change is required, the IoD seeks amendments to the Bill that promote the completion by company boards of an annual “best interests statement” tabled at companies’ Annual General Meetings.
• The IoD would welcome the establishment of an independent Companies Act Working Group tasked with comprehensively reviewing the policy settings and framework underpinning the Companies Act 1993 and other similar governance legislation.