Analysis on corporate governance
compliance standards in New
Zealand –a qualitative study on
disclosures using content analysis
School of Business, Open Polytechnic of New Zealand, Lower Hutt, New Zealand
Purpose –This paper aims to provide more insights into the standard of corporate governance in New
Zealand. The study intends to uncover how a small country with a well-developed economy with a good
system of law and order, good institutional set up and law enforcements and implements the principles
containedin the FMA’s corporate governance guidelines inpractice.
Design/methodology/approach –The study is a mixedstudy one where it employs case study content
analysis and augmented by conducting interviews. Large companies are selected to ascertain the level of
compliance of NZ companiestowards their obligations to report on corporate governancepractices within the
organisation. At the ﬁrst stage, the study uses content analysis and looks at contents of company annual
reports and publicationson websites to determine whether they had disclosed as intendedby New Zealand’s
Findings –The study found that a high compliance was recorded in areas such as board composition and board
committees and low compliance recorded in areas involvingcostlyimplementationorwhentheissueissensitive
such as disclosures regarding remuneration details of directors and what non-audit work was undertaken and
whether it compromises auditor independence. Being a small country, NZ has performedwellinattractingforeign
investment due to its strong tradition of law enforcement and respect for regulations. With greater awareness of
the importance of corporate governance to investors, companies may see the beneﬁt of greater compliance with the
corporate governance guidelines. This is in line with the stakeholder theory and resource dependency theory
where companies will voluntarily disclose information on corporate governance, social and environmental
performance over and above mandatory requirements to appease and manage their stakeholders.
Research limitations/implications –The sample size of thisstudy represents 3 per cent of total listed
companies in New Zealand,but the sample is approximately 10 per cent of local NZ listed companies (i.e. not
dual listed in Australia). There are 36 large companies in the New Zealand stock market with market
capitalisationof 1 billion and above. In addition, the companies selected for this study are well-knownin New
Zealand,and it is acknowledged that this can be a sourceof bias in my analysis.
Practical implications –As was revealed during the interviews with company’s senior ofﬁcials,
Australian companies have achieveda higher level of compliance with the code of corporate governance. In
this regard, New Zealand willhave to step up and follow Australia’s lead to ensure greater compliancewith
the New Zealand corporate governance principles and guidelines. It would be in the best interest of the
company’sstakeholders if full compliance is achieved.
Originality/value –Studies on thelevel of compliance by New Zealand companieson their obligations to
meet the full extentof disclosures as stipulatedby the New Zealand corporategovernance guidelinesare rare.
Thisstudy aims to ascertainthe standardof corporate governancereportingin New Zealand andthe company’s
seriousnessto complyor attempt to meetthe requirementsin the seven stipulatedprinciples.
Keywords Content analysis, New Zealand, Corporate governance, Stakeholder theory,
Resource dependency theory, Compliance and regulation
Paper type Research paper
Journalof Financial Regulation
Vol.26 No. 4, 2018
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