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Director liabilities

  • December 9th, 2011

I’ve just had my attention drawn to a piece in the NBR reporting a conversation with Jock Anderson. I did not expect it to be reported like that, but it is fair, given normal compression.
But it is in unecessarily frank language and omits an aspect I would have highlighted had I realised the conversation would be featured (this is not a criticism of Jock – I should have known better).
The comment omitted was the cost to shareholders of creating asymetric uncompensated risks for directors. When shareholders take the benefit of directors’ risk decisions, but can pass the costs back to directors for ones that go wrong, then Directors can legitimately demand a better chunk of the return that owners would otherwise expect.

The article also leaves the impression that it is judges who are alone responsible for confusing and over-complicating previously conceptually clear law. In fact politicians and officials
responsible for legislation have as much or more to answer for.

Sadly the current is flowing strongly in the direction of even more of this kind of self-defeating “slogan law”.



what value a New Zealand public Company shares traded on exchange.
what value Mark Weldon, nothing

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