NEW ZEALAND Law and Practice Contributed by: Graeme Quigley, Ashton Goatley and Erin Hickey, Webb Henderson
1. Corporate Governance Requirements 1.1 Corporate Forms and Governance Requirements In New Zealand, the principal forms of business organisations are: • bodies corporate – ie, legal persons separate from their owners, including: (a) companies (formed under the Companies Act 1993); (b) limited partnerships (formed under the Limited Partnerships Act 2008); and (c) incorporated societies (formed under the Incor - porated Societies Act 2022), which may not be formed for the purpose of pecuniary gain; and • unincorporated forms – ie: (a) partnerships (formed under the Partnership Law Act 2019); and (b) trusts (formed under equitable principles, com - mon 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”. 1.2 Corporate Governance Legislation and Regulation The primary legislation that governs companies in New Zealand is the Companies Act 1993 (the “Com - panies Act”). On top of the requirements of the Com - panies Act, additional corporate governance require - ments 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 gov - ernance provisions of the Companies Act by adopt - ing 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. 1.3 Companies With Publicly Traded Shares 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 report - ing, 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). 1.4 Stock Exchange Requirements Developments 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 recom - mendation under the CGC). This is a shift from a com - ply-or-explain approach towards a mandatory report - ing requirement. See 3.5 Independence of Directors .
2. Corporate Management 2.1 Principal Bodies or Functions
The principal bodies or functions involved in the gov - ernance and management of a company are its share - holders, its board of directors, and the company’s
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