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5 September 2003

News Release

Securities Commission launches Public Consultation into Corporate Governance Principles

The Securities Commission is launching a national consultation process to establish consensus around the principles of corporate governance that should guide business leaders in New Zealand.

"It is timely to review the level of consensus there is around norms of corporate governance in New Zealand," said Jane Diplock, Chairman of the Securities Commission.

"Since the collapse of Enron and other high profile overseas businesses, governments and regulatory bodies around the world have been engaging with business to review business practices.

"While we haven't seen corporate failures like this in New Zealand, and corporate behaviour is generally of a high standard, it is clear that good corporate governance principles are important in our marketplace.

"We are taking a principles-based approach as the Australians have done, rather than a rules-based approach as in the USA.

"Nine key areas have been identified for consideration. These are closely aligned with the governance frameworks of our major trading partners. While overseas experience is a useful guide, it is important that any corporate governance principles for New Zealand reflect the unique factors in our business environment and are appropriate to them.

Ms Diplock said that good governance doesn't just apply to listed companies.

"There are many other organisational forms in New Zealand where good governance is essential for the integrity of our institutions. We are hoping to engage with organisations such as crown trading entities and health sector bodies, Māori Trust Boards, as well as local government organisations.

"In New Zealand, there has been a lot of work undertaken by professional bodies such as ICANZ and the IOD, by the NZX, and by firms such as Minter Ellison Rudd Watts and PriceWaterhouseCoopers. However, the Minister of Commerce would like us to tie it all together with a wider consultation process.

"We will be distributing a discussion document and a questionnaire on September 8. These will be available in paper form or from our website. We will be asking for responses by November 7. The Minister will receive our report in December."

For further information contact: Julie Myers phone 04 471 4613

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