Supporting the integrity of the corporate governance system

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.

Major initiatives

We are progressing 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.

After considering submissions, advice was shared with ministers and Cabinet made a number of policy decisions supporting the initiatives in December 2021.

In March 2022, the Cabinet paper and Minute were proactively released.

In accordance with Cabinet’s decision, amendments will be required to the Companies Act 1993 and the Limited Partnerships Act 2008. A draft Bill containing the proposed amendments will be made available for public consultation in late 2022 or early 2023. We anticipate that the finalised Bill will be introduced to Parliament in mid-2023.

Beneficial ownership

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.

Discussion document: Increasing the transparency of the beneficial ownership of New Zealand companies and limited partnerships [PDF, 970 KB]

In December 2021, Cabinet agreed that companies and limited partnerships should be required to provide to the Companies Office 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.

Insolvency Law Working Group

In 2016, the Working Group released its first report:

Report No 1 Insolvency Practitioners Regulation and Voluntary Liquidations [PDF, 940 KB]

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:

Discussion document: Consultation on whether to introduce a director identification number [PDF, 512 KB] 

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.

Discussion document: Publication of directors' residential addresses on the Companies Register [PDF, 777 KB]

In December 2021, Cabinet agreed that the Companies Office should establish a unique identifier for individuals who are directors of companies, general partners of limited partnerships, or beneficial owners of either of these entities.