Henderson EmilyDr EMILY HENDERSON (Labour—Whangārei): Always great to get a human rights lecture from people who want to disestablish the Human Rights Commission.I'm not a company lawyer; I was put off company law by precisely the sort of discussion that we've had tonight. I was put off because I grew up in the 80s when it was Greed is Good" and Gordon Gekko was king. As a result I ended up in the highly profitable business of the Family Court.But what we are talking about tonight—for those of us who aren't corporate lawyers like me—is a bit of a recap. We're talking about putting a section into the Companies Act that would include in the directors duties that directors have to take into account when they're making decisions about their company a provision that says essentially "It's not just about the obvious short-term interests of maximising profit for your shareholders; directors have the right and it is appropriate for them to consider longer-term interests."The original form of this bill—as it was presented first by the excellent and very learned Dr Duncan Webb and then taken up I believe by the also excellent and very learned Rachel Brooking and now by my friend colleague and also very learned lawyer Camilla Belich—specified what those additional interests might be. So it talks about society about economy about the environment.The version that's come back from the Economic Development Science and Innovation Committee is a bit more limited. It just says very simply "a director may consider matters other than the maximisation of profit." What this is setting out though—despite Mr Seymour's rather limited view of history—is part of quite a longstanding argument about how companies best do business and what their function is.It is a conflict that goes between the profiteer shareholder model that talks about the maximisation of profit and another model that is gaining traction that is sometimes referred to as the enlightened shareholder or stakeholder model. In the one you're looking for sheer profit maximisation; in the other you're looking for a company that might want to take into consideration longer-term issues.It might see as part of its company's value things that while they do not immediately create profit do—in the longer term—safeguard the company. That's what this is fundamentally about. It's about whether there is a way and is it appropriate for Government to try to incentivise and encourage the enlightened shareholder stakeholder model over the "Greed is good" Gordon Gekko profiteering alone motive. Had I known when I was a young law student about this I might have been more encouraged to take corporate law. Because the fact is we have some fantastic companies who already follow the enlightened shareholder model.For example Patagonia recently made waves—they are one of the world's largest outdoor apparel brands and they make a heck of a lot of money. But they reflected—and I think one of the slogans that turns up in Patagonia's stores is "There are no profits to be made on a dead planet." This company which is family-owned divested themselves—the family divested itself of all but 2 percent of the shares—and it put 98 percent of the shares into not-for-profit environmental organisations.Now on the face of it that is not maximising profit for shareholders. On the enlightened stakeholder model that holds that companies have an interest in wider relationships with the rest of society—and looking around says a dead planet ain't good for profits particularly when you're an outdoor apparel company—this is a longer-term view which does make sense in terms of their profit.But what interests me is this isn't a modern thing. We've had this conflict since the beginning. So it was the famous Milton Friedman who said "The social responsibility of a business is to increase its profits." But who's the greatest capitalist? We all know the beginning of the model. What about Henry Ford if you look to that sheer big company model that we now know? In 1915 Henry Ford was sued by his own shareholders. What he had tried to do was to take fewer shareholder profits and put some of those profits into increasing the pay and the living conditions of his workers and reducing the price of the cars he was producing for the consumer.He was sued by his own shareholders and the Massachusetts Supreme Judicial Court declared for those shareholders. They said it was not part of a director's responsibility to consider the wider stakeholders in society; their duty was simply—as Milton Friedman put it—to increase its profit. But other courts over the years have taken a different view and this is where we see the sort of thing that we're talking about with this bill.In 1989 Time magazine was considering two competing bids: one was from Warner one was from Paramount. Paramount was offering more money but Time felt that Warner would actually protect its key value which was journalistic integrity. They went with Warner; they were sued by their shareholders who said "You should have taken the deal that gave us more immediate profit." The court said "No it was entirely appropriate for the directors to consider the wider stakeholders."It is possible for both views to coexist. But while there are these great companies the problem is they're not all doing the things that we would want them to do; they are not all being good corporate citizens. So we have Bhopal—the world's worst industrial disaster—where a chemical spill on a badly maintained plant resulted in 3787 immediate deaths and around 574000 longer-term deaths. We have the British and American tobacco companies who buried evidence of cancer as a result of smoking. We have the oil and gas industry who it appears have known about global warming and their part in it since the 60s but buried the information so they could go on making profit.Right down to things like the companies like Gap or Primark or Next and H&M who were discovered to be using garment factories in Bangladesh and Pakistan over the last 10 or so years where there had been appalling factory fires with factory owners who were maximising profit. They were producing the clothes cheaply and Primark and Gap and these other companies chose profit over this enlightened stakeholder model.How do we grapple with this? As we look around us and we see climate change overtaking us and we are starting to see people suing those oil and gas companies—particularly in the EU—suing those companies for failures in corporate citizenship do we leave this situation to play out? Other countries have chosen to encourage companies to take that wider perspective. In the UK in 2006—has been said. Strangely the UK economy does remain and I haven't heard anyone suggest that their companies are less than free. Even Singapore—it's being discussed.If we bring in this law—and if it makes it morally easier for one director in one company faced with one decision that will either create profit or maximise the wider interests of stakeholders around the community protect our awa protect our moana protect the health of our children and the future of this planet then I say this law is worth doing.Sometimes Parliament's job is not to put in regulatory systems; sometimes our job is to lead by encouragement. When we live in a world where we have all grown up under the "greed is good" mantra when directors are going to be told and they are told "Your duty to your stakeholders is profit; you cannot take that wider perspective as to the way in which a company should operate." when we live in that world and we need it to shift—we need it to shift—that is where a bill like this can really offer us hope. It can offer us example and I personally commend it to the House."