NZ Companies (Directors Duties) Amendment Bill - B Lab submission due 17 Jan 2023

Kia ora NZ B Corp community!

Hope everyone is enjoying a sunny, relaxing wind down to Christmas for the most part…

I just wanted to flag that B Lab AANZ is preparing a submission for Dr Duncan Webb’s members bill - to clarify the ability for Directors to take into account social and environmental considerations when acting in the best interests of the company. More info here on the bill if you haven’t seen it.

It has a slightly inconvenient deadline of 17th January 2023 but if you see this and would like to contribute your thoughts, testimonials or examples from your own experience of stakeholder governance, please do drop me a line before then and we will do our best to include it! Things like how you have put stakeholder governance into practice in your business and the positive effects this has had would be great examples.

Our general position on the bill is that:

  • We support the bill as a clarification of the existing interpretation of the law - i.e. it is already widely accepted that Directors may take into account these social and environmental considerations when acting in the best interests of the company. The clarification is helpful though to provide certainty to Directors around this.
  • We would also recommend that a deeper inquiry is initiated to look at the development of stakeholder governance in NZ more generally - i.e. what is currently holding more companies back from adopting this governance approach, and what solutions could be put in place to encourage more of this? B Lab AANZ would be very interested to be involved and support this inquiry.
  • The B Corp community in New Zealand and Australia has already adopted a legal framework that goes further than this bill - by making social and environmental considerations mandatory - demonstrating leadership in business and showing what’s possible.
  • The bill is in line with similar laws internationally, e.g. the UK Companies Act already includes a similar clarification
  • It is also in line with tikanga Māori and the approach of intergenerational decision making in business
  • The UK’s Better Business Act campaign proposes to go even further and make this a mandatory consideration for Directors however we believe it would be prudent for NZ to embark on its own inquiry into how best to implement something like this in the future

You are of course also welcome to make your own submissions which we would encourage - however long or short! It’s a great opportunity to be having this discussion with government.

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