A New Zealand Variant of Director Primacy

Published: December 5, 2007, 6:54 pm

I spent most of November in New Zealand on extended holiday, so I was amused to run across an article on New Zealand corporate governance that embraces a version of my director primacy theory of corporate governance: The conventional shareholder-centric view of company law holds that directors manage the company for the benefit of shareholders of the company, and the shareholders have ultimate and residual control over the company. This article re-examines the source of the management powers of the board, and the legal relationship between shareholders and directors. It is argued that corporate governance in New Zealand has a statutory, rather than a contractual, basis, and shareholders cannot in any realistic sense be considered to control the business and affairs of companies. The board plays an essential role in New Zealand companies. It has an irreducible core set of functions relating to the supervision and monitoring of the business and affairs of the company. Where

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