Corporate Governance in New Zealand: The Effect of the 1993 Companies Act on the Relation between Board Composition and Firm Performance
Posted: 18 Jan 2001
The aim of this paper is to explore the efficacy of monitoring by the board of directors, and especially independent outside directors, in New Zealand. The Companies and Financial Reporting Acts of 1993 provide a unique opportunity to examine if legislation directly designed to increase the fiduciary responsibility of the board had a discernible impact on the relationship between independent outside board representation and firm performance. We find that the effects of the Companies Act and related legislation are relatively benign in so far as influencing the relationship between firm performance an outside board representation is concerned. The legislation did not seem to enhance or weaken the positive relationship between outside board representation and firm performance.
Keywords: Corporate governance, board of directors, firm performance
JEL Classification: G34, K22
Suggested Citation: Suggested Citation