In New Zealand, the principal forms of business organisations are:

• bodies corporate – ie, legal persons separate from their owners, including:
1. companies (formed under the Companies Act 1993);
2. limited partnerships (formed under the Limited Partnerships Act 2008); and
3. incorporated societies (formed under the Incorporated Societies Act 2022), which may not be formed for the purpose of pecuniary gain; and
• unincorporated forms – ie:
1. partnerships (formed under the Partnership Law Act 2019); and
2. trusts (formed under equitable principles, common law and the Trusts Act 2019).

Individuals may also carry on business in their own name ‒ in which case, they are commonly referred to as “sole traders”.

The primary legislation that governs companies in New Zealand is the Companies Act 1993 (the “Companies Act”). On top of the requirements of the Companies Act, additional corporate governance requirements are imposed by:

• NZX’s Listing Rules (the “Listing Rules”) for issuers of listed securities; and
• industry-specific legislation (eg, for banks and insurers).

In the absence of any such additional requirements, the corporate governance arrangements applicable to a company are reasonably flexible. A company may add to, negate or modify many (but not all) of the governance provisions of the Companies Act by adopting a constitution that sets out the rules by which the company will be governed. Nevertheless, this chapter will describe the default position under the Companies Act ‒ unless otherwise indicated.

Companies that have financial products quoted on the NZX Main Board or Debt Market must comply with the Listing Rules, which impose requirements in relation to corporate governance – for example, requirements concerning the composition of the board, director remuneration, continuous disclosure, financial reporting, share issues, voting rights, and approval of major transactions.

The NZX also issues a Corporate Governance Code (the CGC) that takes effect on a “comply-or-explain” basis, meaning that the issuer must either comply with the recommendations made in the CGC or explain:

• which recommendations were not followed;
• why, and in what period, those recommendations were not followed; and
• any alternative practice adopted in lieu of those recommendations (in which case, the issuer must confirm that this practice has been approved by its board).

The CGC sets out factors which may cause a board to determine that a director is not independent. As of 31 March 2026, where a director is determined to be independent and one of the factors listed in the CGC, the Listing Rules require that the annual report of the issuer contain a description of the basis upon which the relevant factor was triggered and why the board determined that the relevant factor did not affect that director’s independence (previously, this was a recommendation under the CGC). This is a shift from a comply-or-explain approach towards a mandatory reporting requirement. See 3.5 Independence of Directors.

The principal bodies or functions involved in the governance and management of a company are its shareholders, its board of directors, and the company’s management team, if it has one. (It is common for boards of directors to appoint senior employees to management positions and delegate the necessary authority for managing the day-to-day affairs of the business to those senior employees – see 2.2 Types of Decisions.)

Under the Companies Act, shareholder approval is required for certain significant matters, including adopting or altering the constitution, approving an amalgamation, commencing a voluntary liquidation, and entering into “major transactions”. Major transactions are, in broad terms, those involving the acquisition or disposal of assets, rights or interests (or the incurring of obligations or liabilities) worth more than 50% of the company’s gross asset value immediately before the transaction.

In addition, for NZX-listed entities, the Listing Rules require shareholder approval for material related-party transactions and some categories of major transactions. Recent updates to NZX guidance reflect a shift towards stricter application of the criteria for waivers from these requirements, to preserve shareholder voting rights.

Other decisions rest with the board. While the board may delegate its powers, it remains responsible for monitoring the decisions made by its delegate. There are, however, some powers that may not be delegated by the board, including issuing shares, authorising dividends or other distributions, and acquiring the company’s own shares.

Shareholder resolutions may be passed at a meeting (see 4.3 Shareholder Meetings) or by written resolution.

When shareholders exercise a power reserved to them by the Companies Act or the company’s constitution, the power is exercised by ordinary resolution (ie, a simple majority of votes cast on the resolution) unless otherwise specified in the relevant provision of the Companies Act or constitution. Certain matters require a “special resolution”, which must be approved by at least 75% of votes cast at a meeting. That threshold may be increased (but not lowered) by the company’s constitution.

A written resolution must be signed by at least 75% of shareholders who together hold at least 75% of the voting rights, and must be circulated to non-signing shareholders within five working days after it is passed.

Decision-Making by Directors

Directors may make decisions at meetings or by a written resolution. Schedule 3 to the Companies Act sets default rules for directors’ meetings, including notice (two business days), quorum (a majority), attendance (electronic means are permitted), and voting (a simple majority of votes cast at the meeting, with the chair not having a casting vote). The board must keep minutes of all meetings. Written resolutions require the assent of all directors entitled to receive notice, unless the constitution provides otherwise.

Under the Companies Act, companies have a single board. Boards may appoint committees to take responsibility for particular aspects of the business or the governance of the company, and the Listing Rules require listed companies to have an audit committee. The CGC also recommends that listed companies have a remuneration committee and a nomination committee.

The Companies Act only provides for one class of director, meaning that all directors have the same fundamental role. However, in practice, committee memberships can mean that directors are more involved in certain aspects of the business or its governance than other areas. In addition, the company’s constitution may (if desired) specify different categories of directors. Usually, the board will elect a chair. The default position under the Companies Act is that the chair does not have a casting vote.

The Companies Act requires every company incorporated in New Zealand to have at least one director that lives in either New Zealand or an “enforcement country”. If living in an enforcement country, the director must also be a director of a body corporate that is incorporated in that enforcement country under a law equivalent to the Companies Act. At present, Australia is the only approved “enforcement country”.

The constitution of a company may increase the minimum number of directors.

The Listing Rules require listed companies to have at least three directors – two of whom must ordinarily reside in New Zealand and two of whom must be independent directors. The CGC further recommends that the majority of the board be independent directors.

Industry-specific legislation may impose stricter obligations on the board composition of a company in that industry. For example, the Reserve Bank of New Zealand’s Banking Supervision Handbook for the banking sector and its governance guidelines for the insurance sector both require at least half of the company’s directors to be independent.

See also 3.5 Independence of Directors.

Section 153 of the Companies Act provides that directors are appointed by ordinary resolution of the shareholders, unless the constitution provides otherwise. The court has the power to appoint directors on the application of a shareholder or creditor if there are no directors – or fewer directors than the quorum – and it is not possible or practicable to appoint directors in accordance with the company’s constitution. Directors may be removed by an ordinary resolution of shareholders at a meeting if provided that this purpose is stated in the notice of meeting.

These provisions may be modified by the constitution. For example, in an incorporated joint venture it is common for each shareholder to be able to appoint and remove a specified number of directors, regardless of whether the shareholder is entitled to exercise more than 50% of the votes at a shareholder meeting.

Directors are restrained from acting in situations where their personal interests may conflict with the company’s interests. Section 131 of the Companies Act requires a director to act in good faith and in what they believe to be the best interests of the company when exercising powers or performing duties – see 3.6 Legal Duties of Directors/Officers.

A director is “interested” in a transaction if, in broad terms, the director (or their parent, child or spouse/partner, or another entity of which the director is a director, officer or trustee) is a party to it or may derive a material financial benefit from it, or if the director has a material financial interest in another party to it, or is otherwise directly or indirectly materially interested in the transaction.

An interested director must promptly disclose the interest to the board (unless the transaction is in the ordinary course and on the company’s usual terms), and the disclosure must be recorded in the interests register.

A director may disclose an ongoing interest in a named person or company, with the effect that the director will be treated as having disclosed an interest in any future transaction with that person or company.

Failure to disclose an interest does not invalidate the transaction but does allow the company to avoid the transaction within three months following disclosure of the transaction to all shareholders if the company did not receive fair value (based on the knowledge of the company and the interested director at the time the transaction was entered into), but this is subject to protections for third‑party purchasers for value without notice.

Under the Companies Act, an interested director may generally vote on matters relating to the transaction, be counted in the quorum, and otherwise do anything as though the director were not interested in that transaction. In practice, boards’ charters or codes of conduct often provide for conflicted directors to abstain, and listed company directors must do so under the Listing Rules.

Directors are also restricted from using or disclosing company information that is obtained in their capacity as a director or an employee of the company and not otherwise available to them. Disclosure may be permitted where approved by the board, the company is not (and is not likely to be) prejudiced by the disclosure, and particulars of the disclosure are recorded in the interests register. Disclosure to a nominating shareholder or principal is also permitted (unless prohibited by the board), subject to disclosure of the recipient in the interests register.

Directors must also disclose any acquisition or disposal of a “relevant interest” (ie, an ownership or voting interest) in the company’s shares, including details of the interest and transaction.

Listed company directors and senior managers are required to also publicly disclose any acquisition or disposal of a “relevant interest” in the company’s (and its related bodies corporates’) quoted financial products.

A director must not trade in an unlisted company’s shares or other financial products while in possession of material information about their value (received by virtue of their role) unless the transaction is no more favourable to the director than fair value. For listed companies, insider trading prohibitions under the Financial Markets Conduct Act 2013 (FMCA) apply, preventing trading, tipping or disclosure of inside information.

The Listing Rules and CGC specify additional factors for assessing the independence of directors of listed issuers, including the absence of employment or other disqualifying relationships that could materially influence the independent judgment of that director.

The principal legal duties of directors under the Companies Act are described in the following sections. Directors also have a number of administrative obligations, including those relating to disclosure of their interests and share dealings (see 3.5 Independence of Directors), as well as an obligation to supervise the maintenance of the company’s share register and obligations to ensure relevant filings are made with the Companies Office.

Section 131 – Good Faith and Best Interests of the Company

A director is required to act in good faith and in what the director believes to be the best interests of the company when exercising their powers or duties. This test is subjective – ie, it relies on the director’s belief, rather than what is objectively in the company’s best interests (Madsen-Ries and Levin as Liquidators of Debut Homes Limited (in liquidation) v Cooper (2020) NZSC 100 at [112]) – although “directors will probably have a hard task persuading the court that they honestly believed that an act or omission that resulted in substantial and foreseeable detriment to the company was in the company’s best interests” (at [109]), and “the fact that an allegedly unreasonable belief was held may ... provide evidence that the belief was not honestly held” (at [109]). Case law and commentary has also identified exceptions to the subjective nature of the test where there is no evidence of actual consideration of the best interests of the company, where there is a failure to consider the interests of creditors in an insolvency or near-insolvency situation, where there is a conflict of interest, or where a director’s decisions are irrational (at [113]).

If provided for in the company’s constitution and (in some cases) agreed to by the other shareholders, a director may act in the best interests of a parent company or – in the case of a joint venture – their appointing shareholder, even though such actions may not be in the best interests of the company. In the absence of such a provision in its constitution, the interests of a company must be considered separately from the interests of a group of related companies (Kumar v Smartpay Ltd (2023) NZCA 410).

Section 131 was amended in 2023 to expressly state that as part of directors’ duty to act in good faith and in the best interests of the company, directors "may consider matters other than the maximisation of profit (for example, environmental, social, and governance matters)”. The amendment was criticised as unnecessary and potentially limiting, given its reference to specific matters and its implicit assumption that directors must always consider the maximisation of profit (which is not the case). The current government has announced an intention to repeal it.

Section 133 – Proper Purpose

Directors must exercise their powers for a proper purpose – that is, when exercising a power conferred upon them, the director must exercise that power in line with the purpose for which it was conferred. This duty is distinct from the duty in respect of best interests, as it is possible to exercise a power for an improper purpose even if the director genuinely believed the course of action was in the best interests of the company.

Section 134 – Compliance With Companies Act and Constitution

A director may not act, or agree to the company acting, in a way that contravenes the Companies Act or the company’s constitution. A contravention of another statute would not necessarily breach this duty, but may breach Section 131 (with regard to good faith and best interests of the company) and Section 133 (with regard to proper purpose).

Section 135 – Reckless Trading

A director must not agree to the business of the company being carried on – or cause or allow the business of the company to be carried on – in a manner likely to create a substantial risk of serious loss to the company’s creditors. Whether or not a director believes the conduct of the business is reasonable is irrelevant – the test is an objective one. Directors are required to make a “sober assessment” of whether their future trading forecasts justify continuing to trade and whether the assumptions that underpin those forecasts are reasonable (Mason v Lewis (2006) 3 NZLR 225 at [51]); however, the benefit of hindsight should not be applied to directors’ decisions. If there is not a reasonable prospect of the company regaining solvency, formal insolvency mechanisms should be invoked (see Debut Homes) – it is not enough that the director’s decisions would reduce the overall deficit. Directors may not continue to trade in a way that favours one class of creditors over another.

In the long-running Mainzeal litigation, the Supreme Court upheld the finding of the Court of Appeal that four former directors of Mainzeal (a construction company) breached Section 135 (Yan v Mainzeal Property and Construction Limited (in liquidation)) by extracting money from Mainzeal to an overseas parent company through insolvent intermediary companies. A director of both Mainzeal and its parent company made representations to his fellow directors that the parent company would financially support Mainzeal when it first became insolvent in a balance sheet sense. The representation was not legally binding, and the parent company did not provide the support when it was needed. The directors were found to have exposed creditors to substantial risk of serious loss by continuing to trade in reliance on the non-binding representations and without a substantial capital injection. However, the court did not award compensation in respect of the breach of Section 135, because the court held that the directors’ conduct during the relevant period did not increase the aggregate loss suffered by Mainzeal’s creditors – known as the “net deterioration” approach.

Section 136 – Obligations

A director must not agree to the company incurring an obligation unless the director believes at the time, on reasonable grounds, that the company will be able to perform the obligation when it is required to do so.

In the Mainzeal case, the Supreme Court found that compensation for breaches of Section 136 should be assessed on a “new debt” basis (ie, the value of obligations incurred without reasonable grounds to believe that the company would be able to perform them when due).

Section 137 – Duty of Care

A director of a company, when exercising powers or performing duties as a director, must exercise the care, diligence and skill that a reasonable director would exercise in the same circumstances – taking into account (without limitation) the nature of the company, the nature of the decision, and the position of the director and the nature of the responsibilities undertaken by them.

This section does not automatically impose a higher standard of skill on directors who hold professional qualifications in a particular area. The position may, however, be different if a director is brought onto the board to add a particular skill set.

Section 138 – Use of Information and Advice

The Companies Act expressly permits directors, when exercising powers or performing duties, to rely on reports, statements, financial data, professional and expert advice, and other information provided by:

• those (including employees, professional advisers and experts) whom the director reasonably believes to be competent in the relevant area; and
• fellow directors (or directors’ committees on which the director did not serve) in relation to matters within those directors’ or committees’ designated authority.

In each case, the director must act in good faith, have no knowledge that such reliance is unwarranted, and make proper inquiry where the need for inquiry is indicated by the circumstances.

Mainzeal Implications

The Supreme Court also noted the following implications arising out of the Mainzeal case:

• directors have a continuing obligation to monitor the performance and prospects of the company;
• where monitoring reveals the potential for substantial risk of serious loss to creditors or doubt as to whether there exists a continuing reasonable basis for the belief that obligations incurred will be able to be honoured, directors should squarely address the future of the company;
• directors may need to obtain independent expert advice and the courts will allow a reasonable time for directors to “take stock” and decide on a course of action;
• directors must deal directly with the issues giving rise to the concern, recognising that a long-term strategy of trading while balance sheet insolvent is generally not acceptable; and
• courts will apply a standard of reasonableness when assessing directors’ decisions, noting that:
1. these decisions are likely to involve the exercise of business judgement; and
2. directors are often required to make complex decisions under the pressure of time with incomplete knowledge despite their best efforts, and the courts will avoid “hindsight bias” (ie, will recognise that reasonable decisions may nonetheless turn out badly and there may be more than one reasonable course of action).

All the directors’ duties described in 3.6 Legal Duties of Directors/Officers are owed to the company, rather than to shareholders. A limited set of duties is owed directly to the shareholders, including the duty to supervise the share register and the duty of directors to disclose their interests and dealings in the company’s shares.

Although directors owe none of these duties directly to creditors, Section 135 and Section 136 respectively require directors to consider whether the company’s business is being carried out in a way that is likely to create a substantial risk of serious loss to creditors and whether the company will be able to perform the obligations that it proposes to incur.

If the company became insolvent and was placed into liquidation, the liquidator could then bring an action (on behalf of the company) against a director that had breached their duties to the company. Amounts received from directors as a result would be applied for the benefit of the company’s creditors in the liquidation.

Shareholder Enforcement

A present or former shareholder may bring an action against a director for a breach of duty owed to them as a shareholder (Section 169), but not for breaches of duties owed to the company itself. However, Section 165 allows a shareholder (or a director) to apply to the court for leave to bring proceedings in the name and on behalf of the company for breach of such a duty, or to intervene in existing proceedings to which the company is a party.

In deciding whether to grant leave, the court must consider the prospects of success, cost, likely relief, prior steps taken, the interests of the company, and whether the applicant may have ulterior motives (Johnson v Johnson (2020) NZHC 1563). In Vijayakumar v Vasanthan (2021) NZHC 1827, the court noted that it was helpful in this respect to consider whether an experienced liquidator would bring the claim, given that they regularly decide whether to issue proceedings against directors.

Additionally, the court may decline an application under Section 165 if a more effective alternative remedy exists under Section 174. Leave will only be granted if the court is satisfied that:

• the company does not intend to bring, diligently continue or defend, or discontinue the proceedings itself; or
• it is in the interests of the company that the proceedings should not be left to the directors or to the determination of the shareholders as a whole.

Sections 170 and 172 allow a shareholder to bring an action requiring a director or the company to take any action required to be taken by the directors or the company (respectively) under the Companies Act or the company’s constitution.

In any of the above-mentioned proceedings, the court may appoint a representative shareholder where shareholders have the same or substantially the same interest. to avoid numerous proceedings in which the dispute in each case is essentially the same.

Under Section 174, a present or former shareholder (or any other person on whom the constitution confers the rights of a shareholder) may take action against the company where the “affairs of the company” have been or are being or are likely to be conducted in a manner that is oppressive, unfairly discriminatory or unfairly prejudicial to them (Section 174). The reference to conduct of the “affairs” of a company has been interpreted broadly, encompassing any conduct that generally concerns the company, and including non-compliance with specified provisions of the Companies Act. However, it does not include actions of directors or shareholders in a purely personal capacity (Van der Fluit v O’Neill (2021) NZHC 1651).

What constitutes oppressive, unfairly discriminatory and unfairly prejudicial conduct was considered by the Court of Appeal in Thomas v HW Thomas Limited (1984) 1 NZLR 686 at [694]. It was said in this case that the three terms were not to be read as distinct but, rather, as overlapping terms that help to explain one another. The Court of Appeal in Latimer Holdings Limited v Sea Holdings NZ Limited (2005) 2 NZLR 328 at [138] further elaborated that “unfairness requires a visible departure from the standard of fair dealing, assessed in light of the history and structure of the company and the expectations of its members”.

In Wilding v Te Mania Livestock (2017) NZHC 717, the High Court held that:

• conduct need not be unlawful to be oppressive;
• the inquiry concerns the effect of the conduct, not the intention of the parties;
• the “just and equitable” aspect means plaintiffs should not have acted wrongly; and
• remedies afforded under the section should be designed to best advantage shareholders as a whole.

The court has a broad remedial discretion. However, a fairly calculated buyout offer made by the other parties involved may cure otherwise unfair or prejudicial conduct (Birchfield v Birchfield Holdings Ltd (2021) NZCA 428).

Company Enforcement

The company (under the direction of its board) may bring an action against a director or former director for breach of a duty owed by that director to the company. If the directors do not resolve to do so (eg, if a majority of the board was complicit in the breach), a shareholder or director can apply to the court for leave to bring an action on behalf of the company in the above-mentioned manner.

Consequences

Breaches of the above-mentioned directors’ duties generally attract civil liability (although a number of the administrative provisions of the Companies Act attract criminal liability). The following are two key exceptions.

• Section 138A creates an offence for serious breaches of the duty of good faith. Such a breach will occur when a director, during the course of exercising their powers, acts in bad faith towards the company, believes that the conduct is not in the best interest of the company, and knows that the conduct will cause serious loss to the company. “In short, the offending requires dishonesty” (see Spence v R (2021) NZCA 499 at [36]).
• Section 380 creates an offence for dishonestly failing to prevent a company from incurring a debt where the director knows that the company is already insolvent or will become insolvent as a result of incurring the debt.

The court may also disqualify an individual from being a director in certain circumstances, including for persistent failure to comply with relevant laws or for acting in a reckless or incompetent manner in the performance of the director’s duties, or upon conviction of certain offences or crimes involving dishonesty.

In the course of a liquidation of the company, liquidators, creditors and shareholders also have limited powers to apply to the court to order a director (or a promoter, manager, administrator, liquidator or receiver) to repay or restore money or property under Section 301 if that person has:

• misapplied, retained, or become accountable for that money or property; or
• been guilty of negligence, default or breach of duty or trust in relation to the company.

The key enforcement avenues that are generally applied in respect of corporate governance requirements in New Zealand are described in 3.8 Breach of Directors’ Duties. However, there are other potentially relevant enforcement avenues, including the following.

• The Financial Markets Authority (a regulator) may apply to the court for management banning orders that prohibit individuals from engaging in certain activities with regard to the governance and management of companies.
• The Reserve Bank of New Zealand may remove directors of licensed insurers from their positions if it is not satisfied that they are fit and proper persons to hold those positions. It may also remove directors of banks if specific criteria are met.

Limitations on Liability of Directors

Section 162 of the Companies Act allows a company to effect insurance on behalf of – and to indemnify – its directors, subject to specific limits and exclusions.

The board may authorise the payment of remuneration (or compensation for loss of office) and other benefits (eg, loans and guarantees) to directors, if it is satisfied that any such action is fair to the company. Any director voting in favour must sign a certificate to this effect and setting out the reasonable grounds for their opinion. If these requirements are not satisfied, the director receiving the benefit is liable to the company for the payment or benefit unless they prove that it was fair to the company.

For listed companies, the Listing Rules require directors’ remuneration – and any increase to it – to be approved by ordinary resolution. Failure to do so is a breach of the Listing Rules and may result in enforcement action by RegCo (NZX’s independently governed regulatory arm). The CGC also recommends that listed companies have a remuneration committee to (among others) recommend the appropriate remuneration for directors for shareholder approval.

Directors’ remuneration and other benefits must be entered in the company’s interests register, which must be made available for inspection by shareholders.

The CGC also recommends that listed issuers have a publicly available remuneration policy and fully disclose director remuneration in the issuer’s annual report, including committee fees and benefits for any other services provided to the issuer.

A company has separate legal personality from its shareholders. Unless the company’s constitution provides otherwise, shareholders are not liable for the company’s obligations merely because they are shareholders. As such, their liability to the company is limited to amounts unpaid on their shares, liability for breaches of duty if they act as “deemed directors” of the company, recovery of unauthorised distributions, and liability provided for in the constitution (such as capital calls).

The constitution of the company is binding as between the company and the shareholders and as between the shareholders (Section 31). In closely held companies, shareholders often enter into shareholders’ agreements regulating shareholder conduct. The key advantage of such an agreement is that it does not have to be disclosed – whereas the constitution must be filed with the Companies Office and is publicly searchable, as are the shareholding details of a company’s ten largest shareholders (or, if it is not a publicly listed company, all shareholders).

Although the company’s business and affairs are managed by, or under the direction or supervision of, the board, certain key decisions are reserved to shareholders. These include approving a major transaction by special resolution (see 2.2 Types of Decisions), appointing or removing directors by ordinary resolution, and resolving to amalgamate (other than within a wholly owned group) or to commence a voluntary solvent liquidation, each by special resolution.

The chair at a shareholders’ meeting must allow a reasonable opportunity for shareholders to question, discuss or comment on the management of the company. Shareholders may also pass resolutions relating to the management of the company but, unless the constitution provides otherwise, such resolutions are not binding on the board.

In addition, the company’s constitution may confer powers upon shareholders that would otherwise be exercised by the board (Section 126(2)). A shareholder that exercises, or takes part in deciding whether to exercise, that power is deemed to be a director and subject to the directors’ duties contained in Sections 131 to 138 in relation to that action. Similar provisions apply where the constitution of a company requires a director or the board to exercise or refrain from exercising a power in accordance with a decision or direction by shareholders or, as mentioned in 3.5 Independence of Directors, where a director or the board is accustomed to acting or required to act in accordance with another person’s directions or instructions.

The board of a company is required to call an annual shareholders’ meeting unless there is no business to be conducted, the board resolves not to hold one, and the company’s constitution does not require it.

The board, or any person authorised by the constitution, may call a shareholders’ meeting at any time. A meeting must be called on the written request of shareholders holding at least 5% of the voting rights.

Schedule 1 to the Companies Act sets out the default rules for proceedings at shareholders’ meetings, as outlined below, but subject to modification by the company’s constitution. Written notice of the meeting, specifying the time, the place, the nature of the business to be transacted, and the text of any proposed special resolution, must be given to each shareholder, director and auditor at least ten working days prior to the meeting.

Meetings may be held in person or by audio or audiovisual communication. Shareholders may attend personally, appoint a proxy or, if permitted by the constitution, vote by post (including electronically). A quorum is present if those attending or voting by proxy or postal vote hold a majority of the votes entitled to be cast.

If the directors have elected a chair of the board, that person must chair the meeting if they are present. If the chair is not present within 15 minutes, the shareholders present may choose one of their number to chair the meeting.

The default voting method is by show of hands or, for electronic meetings, as determined by the chair. In each case, the number of shareholders who have voted for or against each resolution by postal vote is also counted. Any five shareholders, the chair, or shareholders who together hold 10% of the votes, may require a poll to be conducted – in which case votes must be counted according to the number of votes attached to the shares held by the relevant shareholders.

Postal votes must be received by the person authorised to receive and count them (or, if there is no such person, any director) at least 48 hours prior to the meeting.

The board must ensure that minutes are kept of all proceedings at shareholders’ meetings. Minutes that are signed as correct by the chair are prima facie evidence of the proceedings.

Shareholders may raise matters for discussion or resolution at the next meeting of shareholders. The Companies Act specifies the timeframes that must be met by a shareholder who proposes to do so and how the cost of giving notice of those matters to all shareholders will be met (ie, whether by the proposing shareholder or the company).

See 3.8 Breach of Directors’ Duties.

Dissenting shareholders have a “minority buy-out right” if they vote against certain proposals that are nonetheless approved by shareholders as a whole, including:

• altering rights attached to shares;
• adopting, revoking or amending the constitution in a way that imposes or remove a restriction on the company’s activities;
• amalgamating with another company; or
• entering into a major transaction.

In these cases, the shareholder may require the company to buy their shares at fair value, as determined by binding arbitration (if needed).

Under the FMCA, a person is a “substantial product holder” of a listed issuer if the person has a “relevant interest” in 5% or more of the quoted voting products (eg, ordinary shares in a listed company) of the listed issuer. A “relevant interest” broadly covers legal or beneficial ownership or the power to control the acquisition, disposal or voting of the voting products.

Persons are required to notify the listed issuer and the stock exchange (for public release) when they become a substantial product holder, when the extent of their relevant interest changes by 1% or more of the total, or when they cease to be a substantial product holder.

Directors and senior managers of a listed issuer must similarly disclose any relevant interests they hold in quoted financial products of that listed issuer.

Companies (whether listed or unlisted) with at least 50 shareholders, 50 share parcels, and consolidated assets of NZD30 million or consolidated revenue of NZD15 million are also subject to the Takeovers Code (and, as such, are known as “Code companies”). The Code generally prohibits a person from holding or increasing control above 20% of the voting rights of a Code company except in specified circumstances, such as a formal takeover offer or with shareholder approval.

Companies that carry out business in New Zealand are subject to financial reporting requirements that vary depending on their place of incorporation, ownership, size and listing status, as follows.

• The following categories of company must file signed audited financial statements with the Companies Office within five months of each balance date:
1. New Zealand-incorporated companies that are not subsidiaries of overseas companies and that have more than NZD66 million of assets or NZD33 million of revenue each of the preceding two financial years;
2. overseas companies carrying on business in New Zealand (or their subsidiaries) that have more than NZD22 million of assets or NZD11 million of revenue in each of the preceding two financial years;
3. companies with ten or more shareholders, unless they opt out by a 95% shareholder resolution; and
4. any company where shareholders holding not less than 5% of the company’s voting shares have given notice requiring the company to opt in to these financial reporting requirements.
• Listed companies must release full-year and half-year results announcements, and annual reports (within three months of each balance date) including audited financial statements.
• Issuers of financial products the subject of a “regulated offer” under the FMCA (ie, for which a “product disclosure statement”, akin to a prospectus, is required) must file signed audited financial statements with the Companies Office within four months of each balance date – whether or not the issuer is listed (see 5.3 Incorporation and Registration).

If a company’s shareholders resolve to adopt, alter or revoke its constitution, the board is required to notify the Companies Office within ten working days and include a copy of the constitution or amendments, which are then made publicly available. Other governing documents (eg, shareholders’ agreements) do not have to be disclosed.

As regards corporate governance disclosures by listed companies, refer to 1.3 Companies With Publicly Traded Shares. The CGC recommends that a listed issuer’s code of ethics, board and committee charters, and certain policies (eg, concerning continuous disclosure, remuneration, diversity and financial product dealings) are made available on the issuer’s website – together with any other key governance documents.

Companies are incorporated by registration with the Registrar of Companies, who heads the Companies Office (a division of the Ministry of Business, Innovation and Employment). Key information that must be filed with, and is publicly searchable through, the Companies Office includes:

• the company’s constitution, registered office, address for service and postal address;
• director details;
• shareholding information for the ten largest shareholders, or all shareholders if unlisted;
• details of shares issued;
• details of any ultimate holding company; and
• the company’s annual return.

The Companies Office has a wide range of powers to ensure that companies comply with their obligations under the Companies Act. Failure to make required filings can result in fines for directors, removal of the company from the register (for failure to file annual returns), management banning orders, or prosecution in serious cases.

Companies that have made one or more regulated offers under the FMCA must also file the relevant product disclosure statement and offer information on the publicly searchable Disclose Register (see 5.1 Financial Reporting Requirements).

New Zealand’s AML regime is designed to align with global anti‑money laundering standards set by the Financial Action Task Force.

Under the Anti‑Money Laundering and Countering Financing of Terrorism Act 2009 (“AML Act”), “reporting entities” must comply with transactional and regulatory reporting requirements. “Reporting entities” include those conducting captured activities, such as providing financial services, acting as a trustee or nominee, managing client funds or assets, or providing company or trust services.

Reporting entities must appoint an AML compliance officer, maintain AML compliance programmes, and submit annual reports to their AML supervisor. The issued AML Programme Guideline emphasises that:

• senior management must approve and oversee the AML programme;
• the board must ensure adequate resources are allocated to compliance; and
• governance structures must support effective detection and mitigation of AML related risks.

Independent review and audit of the risk assessment and AML Programmes is required by the AML Act.

The AML Act provides for both civil and criminal enforcement. Directors may face personal civil liability (up to NZD200,000) where they knowingly permit AML failures or fail to ensure adequate oversight. Individuals who knowingly or recklessly breach key obligations (including customer due diligence, record‑keeping or suspicious activity reporting) may also face fines of up to NZD300,000 and/or up to two years’ imprisonment. Recent case law suggests courts may adopt a stricter sentencing approach as the regime matures. Beyond the AML Act, failure to ensure AML compliance could constitute a breach of other directors’ duties – see 3.6 Legal Duties of Directors/Officers.

For details of when a company’s financial statements are required to be audited, refer to 5.1 Financial Reporting Requirements. If they are required to be audited, this must be done by a qualified auditor or audit firm, in accordance with applicable auditing and assurance standards. For that purpose, the company must appoint an auditor at its annual meeting to hold office until the close of the next annual meeting. The auditor is automatically reappointed at each subsequent annual meeting unless they resign or cease to be qualified or the company passes a resolution to replace them. A director or employee of the company (or a partner or employee of any such person) may not be appointed or act as an auditor of the company.

The directors must ensure that the auditor has access to the company’s accounting records at all times. The auditor may require a director or employee of the company to provide such information and explanations as the auditor thinks necessary for the performance of the auditor’s duties. The directors must also ensure that the auditor is allowed to attend any shareholder meeting, receives all notices and other communications to shareholders regarding the meeting, and is permitted to speak at the meeting on any part of the business of the meeting that concerns the auditor.

New Zealand has implemented United Nations sanctions (under the United Nations Act 1946) and country-specific regimes like the Russia Sanctions Act 2022 (RSA), which impose legal restrictions on dealings with designated individuals, entities, goods, or countries. Like the AML regime, the RSA primarily relies on a risk based approach to compliance. Businesses are expected to understand and manage their own sanctions-related risks, and put measures in place to avoid breaches. As such, while there is no express duty on boards to oversee sanctions compliance, the duties discussed in 3.6 Legal Duties of Directors/Officers require boards, or committees (to the extent mandated to do so), to consider sanctions and geopolitical risks as components of an entity’s risk management and legal compliance framework.

However, under the RSA, reporting entities under the AML Act are required to notify the Commissioner of Police where they suspect they hold assets, or are providing services, that are subject to sanctions. By implication (but not as a statutory duty) AML supervisors play a key role in monitoring and organisations compliance with the RSA.

In February 2024, the Supreme Court released its decision in Smith v Fonterra & Ors (2024) NZSC 5, declining to strike out a claim against a group of substantial New Zealand businesses. The claim was framed in terms of the existing recognised torts of public nuisance and negligence, and a proposed novel tort of “climate system damage”. The Supreme Court held that the claim under public nuisance was not “bound to fail” and should not be struck out, meaning that the matter may now proceed to a substantive hearing. The causes of action in negligence and “climate system damage” were consequently also not struck out on the basis that to do so would not achieve a “material saving in hearing time or other court resources”. The litigation is ongoing.

The CGC features a recommendation that issuers annually provide non-financial disclosures (including in relation to “environmental, social sustainability and governance factors and practices”) and the ESG Guidance Note provides practical guidance on the scope and content of ESG reporting, encouraging issuers to align their reporting with recognised global sustainability and ESG reporting frameworks (where appropriate).

In addition, the FMCA includes a climate disclosure regime that requires large financial institutions to produce annual climate statements disclosing information about the impacts of climate change on their businesses, emissions governance, risk management and related metrics and targets. The current government has announced an intention to raise the threshold for this regime to apply, such that it will in future apply only to approximately 200 particularly large financial institutions. Legislation to this effect is currently before Parliament at the time of writing.

A range of regulatory inquiries in New Zealand and Australia over recent years have emphasised the importance of institutional culture in mitigating the risk of misconduct or undesirable outcomes for consumers, including that boards of directors are expected to take ownership of organisational culture and set the “tone from the top”, as part of their wider responsibility for risk management.

The Listing Rules require listed issuers to report the gender balance of their directors and officers, along with a performance review of the issuer’s diversity policy.

As with many overseas jurisdictions, ESG featured less prominently in New Zealand’s political discourse in 2025 than in preceding years, reflecting instead a focus on cost of living pressures and geopolitical uncertainty. This is consistent with the current government’s narrowing of the mandatory climate-related disclosure regime (see 7.1 ESG Requirements).

However, there has been no wholesale retreat from ESG considerations in corporate governance practice. Directors’ duties continue to require consideration of material environmental and social risks where relevant to the company’s interests, and stakeholder expectations, investor scrutiny and soft law instruments remain significant drivers of corporate behaviour.

New Zealand has no AI-specific legislation or regulation, nor does the current government have plans to introduce any. The government has consistently signalled that a “light-touch” regulatory approach will be taken to AI economy-wide. AI use, compliance and oversight is therefore governed by a combination of existing statutory frameworks, voluntary government guidance, and sector-specific regulation, including the Companies Act, the FMCA, the Privacy Act 2020, the Fair Trading Act 1986 (FTA), and the Commerce Act 1986.

New Zealand’s “Strategy for Artificial Intelligence: Investing with confidence” (“Strategy”) (launched in July 2025) together with the “Responsible AI Guidance for Businesses” (“AI Guidance”) detail a range of matters that businesses should consider when using, developing or deploying AI, including cybersecurity, privacy, workplace, and intellectual property considerations. While the Strategy and AI Guidance impose no legal obligations, they represent the government’s expectation of responsible AI governance and are instructive to AI use-related risks for businesses.

See 8.2 AI Use-Related Risks for further detail on a board’s role in respect of AI.

New Zealand law is not prescriptive as to which corporate bodies or functions must oversee AI governance and AI use-related risks.

Ultimately, as with all significant reputational, operational and legal risks, the board of any entity will be accountable for AI governance and risks as part of its obligations under the Companies Act. For example, a director who fails to inform themselves about the risks and limitations of AI systems, or who uncritically relies on AI-generated outputs, may fall short of their duties discussed at 3.6 Legal Duties of Directors/Officers.

It is therefore important for directors to embrace digital leadership at the governance level. Directors should avoid delegating responsibility for AI governance to management and committees without ensuring there is appropriate oversight.

See 8.1 Board Oversight of AI for a discussion of the recent developments in AI regulation in New Zealand.

In the absence of any AI-specific legislation, existing regulatory regimes and principles will apply equally to AI-related products, generated outputs, and automated customer interactions. For example:

• any representations regarding AI technologies (as with all representations) should at a minimum be accurate, properly substantiated, and not misleading;
• models or internal tools which are trained on personal information would require the appropriate consent from the subject of the information, or they could fall afoul of the Privacy Act; and
• as companies look to AI software development tools, there is a risk that these systems could introduce security vulnerabilities resulting in unauthorised access to personal information in breach of the Privacy Act.

New Zealand has no AI-specific mandatory disclosure regime. Companies and issuers are not currently required by statute, regulation, or Listing Rules to disclose AI use, strategy, governance, risks, incidents, or controls as a discrete matter. Material AI-related matters, including risks, incidents, or impacts on business, would just be covered to the extent they fall within existing disclosure frameworks (as if they were any other form of risk, applicable incident or impact).

For example, product disclosure statements (akin to a prospectus) and their accompanying public disclosures are, between them, required to contain all “material information” in relation to an offer of financial products to retail investors. Where information relating to AI use, strategy or risks is material to the issuer of the financial products, that information would need to be disclosed in that way.