Corporate Stakeholders in New Zealand – The Present, and Possibilities for the Future
18 New Zealand Bus. L. Q'trly (2012)
20 Pages Posted: 10 Jul 2012
Date Written: June 1, 2012
The stakeholder principle represents a refinement of the more limited conception of business corporations as vehicles designed to promote the economic interests of their shareholders. It has gained significant recognition in corporate governance in the recent times. The stakeholder vision articulated in recent times covers a large number of non-shareholder groups – employees, suppliers, communities and so on – and advocates greater corporate engagement in protecting their interests and enhancing their welfare.
This article reviews company law in New Zealand, and finds that the current statute, the Companies Act 1993, does not explicitly recognise the stakeholder idea. Yet it has a mechanism that potentially enables companies to name any individual or group as an “entitled person” for invoking the oppression remedy and certain other purposes. Companies can include employees, suppliers or any other stakeholder as entitled persons. The article also presents the results of a survey of companies listed on the New Zealand Stock Exchange and finds that a large majority of them acknowledge stakeholder interests in some form or other. Referring to the evidence from the field, the article argues for developing a richer and more inclusive theory of company law for New Zealand – one that reflects the stakeholder principle which several companies already acknowledge in their governance policies and practices.
Keywords: Companies, corporate governance, New Zealand, shareholder primacy, stakeholder principle
JEL Classification: B25, K22, L21
Suggested Citation: Suggested Citation