Supporting the integrity of the corporate governance system
The corporate governance system provides the legal infrastructure for the operation of businesses, not-for-profit entities and civil society organisations.
The system's objective
The system's objective is to promote accountable, transparent, and high-performing businesses and other entities. It achieves this by setting rules and incentives for how entities are structured, governed and dissolved.
Supporting the integrity of the corporate governance system builds an environment of trust, transparency and accountability in New Zealand’s business environment. This allows businesses, investors and consumers to make informed decisions, and fosters long-term investment, financial stability and business integrity.
Within the corporate governance system, the companies and limited partnerships registers hold publicly available information about certain businesses and the people who own or govern them. The transparency and integrity of this information helps to achieve the objectives of the corporate governance system, by ensuring that these people can be held accountable.
We are considering 2 major initiatives to support the integrity of the corporate governance system:
- increasing the transparency of beneficial ownership
- introducing a director identification number.
In June 2018, we released 2 discussion documents on the above initiatives for public feedback. Submissions closed on these consultations on 3 August 2018.
We are currently considering submissions and preparing advice to ministers on both these initiatives.
There is an international trend towards increasing the transparency of beneficial ownership to combat misuse of corporate entities by criminals.
Identifying beneficial owners helps law enforcement agencies to detect and deter crime.
Increasing the transparency of beneficial ownership also supports the integrity of the corporate governance regulatory system, by ensuring people know who ultimately owns or effectively controls corporate entities.
In mid-2018, we consulted on what requirements there should be on New Zealand companies and limited partnerships to hold and disclose information about their beneficial owners.
Director identification number
The Insolvency Working Group (Working Group) was a panel of experts set up in November 2015 to examine aspects of corporate insolvency law.
In 2016, the Working Group released its first report:
One of the recommendations was the introduction of a unique identification number for company directors (a director identification number or DIN). A DIN is a number which would be assigned to each New Zealand company director and recorded against their name on the companies register.
A DIN would support accountability and transparency in the companies register by helping users identify directors and the companies with which they are connected.
In 2017, we undertook further consultation on whether to introduce a director identification number:
Submissions indicated general support for this proposal. Some submissions also identified an opportunity to address concerns about directors’ residential addresses being publicly available on the companies register, if a DIN is introduced.
In mid-2018, we consulted on whether the residential addresses of New Zealand company directors should continue to be published on the companies register if a DIN is introduced.