The Law Commission is currently conducting a comprehensive review of the duties and potential liabilities of company directors in New Zealand. Named “Haemata Haepapa,” which translates from te reo Māori to “responsible leadership,” the project marks the first time these core corporate duties have been thoroughly examined since they were enacted over three decades ago.
The review was prompted by the Government and is driven by recent court decisions that have highlighted significant issues regarding how directors’ duties operate when a company faces the risk of insolvency. Led by Commissioner Hon Judith Collins KC, the independent agency is tasked with evaluating whether current legislative frameworks require reform.
Two Core Areas of Focus
The Law Commission’s investigation is strictly divided into two primary areas of reform:
- The Companies Act 1993: The review will target the “core” general duties found specifically within sections 131 to 145 of the Act. It will examine how these duties are enforced and the nature of director liability for breaches. Minor administrative obligations are explicitly excluded from this project.
- External Legislation Consistency: Beyond core corporate law, directors face varied responsibilities under piecemeal laws like the Health and Safety at Work legislation, Financial Markets Regulation, the Building Act, and the Fair Trading Act. The Commission will determine how future laws can assign these liabilities in a more consistent and principled manner.
Process and Next Steps
The project commenced on 21 August 2025 with the publication of its official terms of reference. The independent agency is currently executing its research phase to pinpoint exact legal issues requiring amendment.
The timeline for the remainder of the review consists of two major milestones:
- Public Consultation (2027): The Commission will publish an Issues Paper to gather formal public and stakeholder feedback.
- Final Report (2027): A Final Report containing explicit recommendations for law changes will be submitted to the Minister of Justice and presented to Parliament.
Ultimately, the Government will maintain full authority to decide whether and how it will amend New Zealand law based on the Commission’s independent advice.
Would you like me to focus on a particular section of this updated summary, such as how the Law Commission operates independently or the specific non-Companies Act statutes included in the review?
