Potaka TamaTAMA POTAKA (National—Hamilton West): I'm extremely enthusiastic—in fact pumped—today to speak to this bill. Nothing stokes the fire of a former corporate lawyer more than talking about corporate law. It's like that famous bar room line in Hood Street in Hamilton: That's enough about me what do you think of me?" It's great to see all the lawyers out there—some of whom are leaving—opining on companies legislation. The purpose of this bill which is to make it clear that a company director can consider matters other than profit maximisation—what those matters are we don't know yet—is one that really provokes me. Actually I don't know any credible director worth their position that does not do this already. What those matters are remain the purview of those directors in place at the time and they need to contend with those. In fact in some instances there's more C and E than S and G—there's more culture and environment than social and governance—at other times there's more culture and governance and less environment and social and of course there are a few other things like language that can play into the heart of decision making: is it going to be a reo Māori one a reo Pākehā one or a reo Wīwī one? On inquiry and looking more closely into the proposed legislation I'm profoundly cautious—cautious that I don't have a slip and fall accidentally on the side here too; I'll move this way. Section 131 of the Companies Act states that when directors exercise powers or perform duties she or he "must act in good faith and in what the director believes to be in the best interests of the company." and common law—fiduciary law—also dictates and implores these similar expectations. Current legislation provides that a director of a company commits an offence if he or she acts in bad faith towards the company while believing his or her conduct is not in the best interests of the company and will cause serious loss. The proposed provisions add nothing but text: "To avoid doubt in considering the best interests of a company or holding company for the purposes of this section a director may consider matters other than the maximisation of profit." So you can consider anything and that's about as good as saying you consider nothing. As my former form teacher Fred Jackson brother of Syd and Moana would say "Too vague boy too vague." The wording in this bill is a mishap e hoa mā. It's really unclear what the pātai is that this whakautu is trying to answer. Directors' duties—they're sourced in common law fiduciary law and sometimes statute. They're codified. They include acting in good faith acting in the best interests of the company acting for proper purpose exercising independent judgment avoiding conflicts of interest—very topical today—maintaining and keeping records and complying with the Companies Act and related legislation and these are fundamental to the credible corporate governance of companies. B corporations are already set up to meet high standards of social and environmental performance accountability transparency. In my various roles and responsibilities I've had the great privilege to sit along and to listen to various sages diverse warriors of corporate governance practice in New Zealand people like Rob McLeod and Joanna Perry who have demonstrated a professionalism and diligence in their daily decision-making for Tainui Group Holdings. They had the temerity and the audaciousness to drive Tainui Group Holdings forward with The Base retail centre in Hamilton West—if you haven't been there—residential developments at Rotokauri and Five Crossroads various hotel developments like the Pullman Te Arikinui the Novotel Auckland Airport and the Novotel Tainui in Hamilton West and the mother of all logistics developments known as the Ruakura Superhub. Those people made decisions monthly to move the economic dials and they considered financial and non-financial implications during option analysis and ultimately resolutions. They did not need a statutory provision to tell them what they needed to do; they just did it. My life as a board secretary would never be the same after one board meeting with either of those two people and others that I got to know. Backed up then as the first trainee CEO of Ngāi Tai ki Tāmaki the Ngāi Tai nation iwi karoro inu tai [the governor from Maraetai] with James Brown or Hemi Paraone—not the dancer but the governor from Maraetai—John Robertson a former colleague of y'all in this House and Anita Killeen and the indomitable Billy Brown who instilled a genuine sense of practical intuition into decision making by governors. Governance ambitions were inevitably disproportionate to their financial capacity but this did not phase them. It was in fact the very fearlessness that drove the decision making through the history and herstory of Ngāi Tai ki Tāmaki to do quite unusual things like buying Macleans College worth $120 million in Bucklands Beach—a great place—David Seymour: Macleans? TAMA POTAKA: —great place—when they only had a $25 million asset base. Their notion of cultural and E S and G decision-making was hard-wired. They did not need a statute to tell them what to do. What they and others showed me was that excellent governance practice is not driven out of amorphous statutory provisioning that jumps on the road to nowhere but rather from a credible decision-making framework an awareness of statutory and common law duties required for company decision-making and a careful balancing of the various factors that enable a genuine and accurate assessment of risk and reward over time. Masters Woodhouse McKelvie Ms Kuriger and others know this and deep down I'm confident that Ms Belich and my former academic colleague Minister Webb know this too. The legislation design and advisory committee of the New Zealand Law Society and others have all said that this is unnecessary. It could have unintended consequences and it could give rise to more judicial activism and that's all we need! Imagine all the legal beagles barking around the legislative dishes today as we get a real doozy a game-changer for directors to completely adjust their behaviour. The bill continues to reinforce this Government's modus operandi. It knows everything and knows best—omniscience—it wields power to achieve its own objectives however wayward—omnipotence—and it will make up solutions and see things that just don't exist—hallucinatory. I've said this before in the House and elsewhere: the best people to run businesses are business not govt.nz whether or not that's from Tukituki or Northcote and certainly not one ideologically driven agenda. Our view is that many governors already consider these matters in their decision making—that is all matters profit maximisation and others. It's already in their best interests as organisations to do so and therefore this bill is not necessary. Our learned colleagues much more so than others—much more learned than ourselves on these matters—from auspicious organisations such as the Law Society oppose this bill and so do we. Their guidance has been received and it will take some boldness—some boldness—by the Government to say "No we know best. We know what directors should do in making decisions. In fact we might even make their decisions for them." because that's the next stage of this slippery slope. A likely theme for this Government that does nothing to fortify corporate governance practices and does everything to make things more squishy squashy and foggy: why not use guidance or training materials from the Government to help educate directors and give some of those 1400 bureaucrats something to do? The Institute of Directors and others are already training people in this space. The NZX listing rules have given guidance. Most importantly the best interests of the company are just that—best interests. Folks we're on a slippery slope. Yesterday I got the ACC reporting function past the opposition goalie; today it's an unusual and uninteresting obligation on directors; and tomorrow ko wai ka hua ko wai ka tohu [and tomorrow who can say]? A well-meaning waste of time. It's like having me a guy who's flat on āmine trying to sing in the whānau band—a nice idea but not a good one. Like Linda Ronstadt I don't know much but I know I love law and as a former corporate lawyer with a trifle of experience I feel as though this provision creates wide space for judicial activism or misinterpretation. As such it's an uncertainty that I'm unwilling to concur with and tonight on this dark Wednesday night I oppose the bill. Kia ora tātou."