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Companies Act Reform: What It Means for Your Board

The law that defines what you owe your company, and what you are personally on the hook for, is more than thirty years old. The Government has said it intends to reform it, and a review is under way. Not in one dramatic stroke, but in stages, across several years, with the part that matters most to directors, your duties and your liability, saved for a deeper review that has yet to report.

That staged approach is the quiet risk. A reform that arrives all at once gets a headline and a deadline. A reform that arrives in pieces is easy to miss, until the piece that changes your obligations has already commenced and your board never adjusted. Here is what is actually in motion, what has stalled, what it means for you, and how to make sure your board moves with it rather than after it.

What is actually being reformed

New Zealand's principal company law statute, the Companies Act 1993, is the subject of a two phase reform plan. The work is being done in phases rather than as a single replacement Act, and it helps to hold the two parts separately in your mind.

The first phase is the practical modernisation: simplifying, digitising, and tidying rules that have not kept pace with how companies actually operate. The Government announced the package in August 2024. It also includes a unique identifier for directors and a proposal to extend the period in which a liquidator can recover insolvent transactions with related parties from two years to four. The plan was to carry it in a Corporate Governance Amendment Bill. As at 20 October 2026, no such bill has been introduced to Parliament, and Parliament has now dissolved ahead of the general election on 7 November 2026. Whether and in what form the package is picked up again is a matter for the next government.

One related change has been enacted separately. The Companies (Address Information) Amendment Act 2025 received royal assent on 18 November 2025. It lets a director who can show that publishing their home address is likely to cause physical or mental harm to them, or to someone they live with, apply to have an alternative address shown on the Companies Register instead. It starts on a date set by Order in Council or, if none is set, automatically on 18 November 2026, so it is in force by that date at the latest. Useful, low drama, and a response to genuine safety concerns directors have raised.

The second phase is the one to watch. It reaches into the substance of directorship: the duties directors owe, the circumstances in which a director can be held personally liable, and the enforcement that sits behind those duties. The Law Commission began its review of directors' duties and liabilities in August 2025. It is looking at the core duties in the Companies Act, including how they are enforced, and at whether duties and liabilities under other legislation can be approached more consistently. The Commission has said it expects to publish an issues paper and consult publicly in 2027, and to complete its final report in 2027, after which the Government decides whether to change the law. This is the part with teeth. It is also the part still being worked through rather than settled, which means the smart move now is to follow it, not to wait for a final answer.

The detail here turns on the Companies Act 1993, the specific amending legislation as it is passed, and any sector rules that apply to your organisation. Treat this guide as orientation on a moving picture, not legal advice, and confirm the current position with your own adviser.

Why this reaches you personally

Most regulatory change lands on the organisation. This one lands on the director.

Your core duties, to act in good faith and in what you believe to be the best interests of the company, to exercise care, and not to trade recklessly, are not abstractions. They are the standard a court measures you against if things go wrong, and they are personal. When the rules around those duties, around when liability attaches, and around how breaches are enforced are under active review, the ground beneath every board decision is shifting slightly.

One thread worth following closely is the question of what a director is allowed to weigh. A 2023 amendment clarified that you may consider matters beyond pure profit, environmental, social, and governance factors among them, when you judge what is in the company's best interests. That provision remains in force today. The Government's first phase package, announced in August 2024, proposed repealing it, and the core duties are also within the Law Commission's review. Because the first phase has not been introduced to Parliament, nothing has changed yet. Whether and how the clarification survives is exactly the kind of detail that changes how a careful board frames its decisions. You do not need to predict the outcome. You need to know the question is live.

What a prepared board does now

You cannot control the pace of a reform. You can control whether your board is the kind that absorbs change as it comes, or the kind that discovers it late. The difference is a handful of habits.

1. Treat "the law is changing" as a standing oversight item, not a one off briefing. A reform in phases needs revisiting each time a phase moves. Put regulatory change on the agenda as a recurring line, so it is reviewed on a cadence rather than remembered by accident.
2. Name an owner for legislative watch. Someone, often the company secretary or chair, holds the job of tracking where the reform is and flagging when a stage actually commences. Diffuse responsibility is how changes slip through.
3. Capture each change as a concrete obligation, with an owner and a date. "We should look into the Companies Act reform" is not an obligation. "Confirm whether the address confidentiality change affects our register, owner the company secretary, by the next meeting" is. Vague awareness protects no one.
4. Revisit your high stakes decisions against the duties as they stand. When the standard you are judged against moves, the decisions most exposed are the big, contestable ones. A board that has documented why a decision was in the company's best interests is in a far stronger position than one relying on memory.
5. Keep the record auditable. If a regulator or a court ever asks how your board responded to a change in the law, the answer should be a dated trail, not a recollection.

The failure modes to avoid

• The change that commences while you are not looking. A phase passes, an obligation shifts, and because no one owned the watch, the board adjusts months late or not at all.
• Awareness without action. Everyone knows "the Companies Act is being reformed." Nobody has turned that into a tracked obligation with an owner, so nothing actually happens.
• The stale assumption. A board keeps operating on the rules as they were when the directors were appointed, never noticing the standard moved underneath them.
• The undocumented decision. A significant decision made in good faith, but with no record of the reasoning, is the one that looks worst if the duty it touched has since come under scrutiny.

A practical checklist

• [ ] Regulatory and legislative change is a standing item on your agenda, not an occasional one
• [ ] One named person owns tracking the Companies Act reform as it moves through its phases
• [ ] Each relevant change is recorded as a concrete obligation, with an owner, a status, and a date
• [ ] High stakes decisions are documented against the directors' duties as they currently stand
• [ ] The board's response to each change is captured as a dated, auditable record
• [ ] Sector specific rules (charities, Crown entities, financial markets participants) are checked alongside the general reform