The Relationship Between Corporate Governance Practices and Financial Performance in New Zealand: An Empirical Investigation
type: CreativeWork
description: Corporate Governance is the set of structures and behaviours by which a company or other business entity is directed and managed (New Zealand Securities Commission, 2003). The structures and behaviours guide how the entity sets objectives, develops strategies and business plans, monitors and reports on performance, and manages risks. They also guide how directors and managers meet all expectations and that they are responsible and accountable in their respective roles. In 2004 the New Zealand Securities Commission (NZSC) adopted a principle-based corporate governance approach which was intended to contribute to high standards of corporate governance in New Zealand entities. The principles/guidelines are broad statement generally applied to the governance of entities that have economic impact in New Zealand or are accountable, in various ways, to the public. The economic entities are required to observe the principles/guidelines to the fullest extent that they reasonably can and depart only where they are subject to competing statutory or public policy requirements (NZSC, 2004). This thesis investigates the effect principle-based corporate governance practices have on the financial performance of publicly listed companies and public corporate entities in New Zealand. The adoption of the principle-based approach was to encourage entities to develop governance structures that are specific to their context. Therefore, this research examines: (i) whether the NZSC recommendations have encouraged institutions to develop entity and/or industry specific governance structures; and (ii) whether the differences in governance practices at entity and industry level contribute to the differences in the financial performance. Prior studies have examined governance practices of larger corporations in large economies. The governance practices of companies in smaller economies have received little attention. This research extends the understanding of responses to smaller entities, bot…
abstract: Corporate Governance is the set of structures and behaviours by which a company or other business entity is directed and managed (New Zealand Securities Commission, 2003). The structures and behaviours guide how the entity sets objectives, develops strategies and business plans, monitors and reports on performance, and manages risks. They also guide how directors and managers meet all expectations and that they are responsible and accountable in their respective roles. In 2004 the New Zealand Securities Commission (NZSC) adopted a principle-based corporate governance approach which was intended to contribute to high standards of corporate governance in New Zealand entities. The principles/guidelines are broad statement generally applied to the governance of entities that have economic impact in New Zealand or are accountable, in various ways, to the public. The economic entities are required to observe the principles/guidelines to the fullest extent that they reasonably can and depart only where they are subject to competing statutory or public policy requirements (NZSC, 2004). This thesis investigates the effect principle-based corporate governance practices have on the financial performance of publicly listed companies and public corporate entities in New Zealand. The adoption of the principle-based approach was to encourage entities to develop governance structures that are specific to their context. Therefore, this research examines: (i) whether the NZSC recommendations have encouraged institutions to develop entity and/or industry specific governance structures; and (ii) whether the differences in governance practices at entity and industry level contribute to the differences in the financial performance. Prior studies have examined governance practices of larger corporations in large economies. The governance practices of companies in smaller economies have received little attention. This research extends the understanding of responses to smaller entities, bot…
author: Reddy, Krishna
keywords: Corporate Governance, Performance-based, Soft-regulation, Financial performance
license: https://researchcommons.waikato.ac.nz/bitstreams/b740b112-0831-4a62-82e7-44d6225e4425/download
date published: 2010
date modified: 2026-07-24T05:57:52Z
provider: University Waikato
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: University of Waikato