By: Steven Moe, 27 October 2022, ADLS

Chair of the GAIL Asia Pacific Regional Board, Steven Moe, writes about the changes proposed to New Zealand’s Parliament to amend s 131 of the Companies Act 1993.

We live in a world where we need to reimagine the role of business. We need to consider questions of moral imagination as well, like “when is enough, enough?” How can we empower and incentivise founders to pursue both profit and purpose? And if a company consistently profits from producing single-use plastic items to sell sugared-up water to children that impacts their health negatively, then are we okay with that?

– Steven Moe, 27 October 2022, ADLS

Proposed amendments to S131 of the Companies Act 1993

The proposed changes to be added to s 131 of the Companies Act 1993:

“To avoid doubt, a director of a company may, when determining the best interests of the company, take into account recognised environmental, social and governance factors, such as:

• recognising the principles of the Treaty of Waitangi (Te Tiriti o Waitangi):
• reducing adverse environmental impacts;
• upholding high standards of ethical behaviour; 
• following fair and equitable employment practices; and
•  recognising the interests of the wider community.”

This bill makes clear 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.

Review the progress of the Companies (Directors Duties) Amendment Bill