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

See all articles by Mahmud Hossain

Mahmud Hossain

Nanyang Technological University (NTU) - Division of Accounting

Andrew K. Prevost

University of Vermont

Ramesh P. Rao

Oklahoma State University - Stillwater - Spears School of Business - Department of Finance

Abstract

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

Hossain, Mahmud and Prevost, Andrew K. and Rao, Ramesh P., Corporate Governance in New Zealand: The Effect of the 1993 Companies Act on the Relation between Board Composition and Firm Performance. Pacific-Basin Finance Journal. Available at SSRN: https://ssrn.com/abstract=252460

Mahmud Hossain

Nanyang Technological University (NTU) - Division of Accounting ( email )

Nanyang Business School
Singapore, 639798
SINGAPORE
+ 65 792 4217 (Fax)

Andrew K. Prevost

University of Vermont ( email )

Burlington, VT 05405
United States

Ramesh P. Rao (Contact Author)

Oklahoma State University - Stillwater - Spears School of Business - Department of Finance ( email )

Spears School of Business
Stillwater, OK 74078-4011
United States
405-744-1385 (Phone)
405-744-5180 (Fax)

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