Corporate governance in New Zealand: The effect of the 1993 Companies Act on the relation between board composition and firm performance

Mahmud Hossain; Andrew K. Prevost; Ramesh P. Rao

doi:10.1016/S0927-538X(01)00003-8

Corporate governance in New Zealand: The effect of the 1993 Companies Act on the relation between board composition and firm performance

Mahmud Hossain^*, Andrew K. Prevost, Ramesh P. Rao

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

105 Scopus citations

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 and outside board representation is concerned. The legislation did not seem to enhance or weaken the positive relationship between outside board representation and firm performance.

Original language	English
Pages (from-to)	119-145
Number of pages	27
Journal	Pacific Basin Finance Journal
Volume	9
Issue number	2
DOIs	https://doi.org/10.1016/S0927-538X(01)00003-8
State	Published - Apr 2001
Externally published	Yes

Keywords

Board of directors
Corporate governance
Firm performance
G34

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/S0927-538X(01)00003-8

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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 and outside board representation is concerned. The legislation did not seem to enhance or weaken the positive relationship between outside board representation and firm performance.",

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AB - 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 and outside board representation is concerned. The legislation did not seem to enhance or weaken the positive relationship between outside board representation and firm performance.

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KW - Corporate governance

KW - Firm performance

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Corporate governance in New Zealand: The effect of the 1993 Companies Act on the relation between board composition and firm performance

Abstract

Keywords

ASJC Scopus subject areas

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