Submission on conduct of financial institutions options paper

We support the Ministry of Business, Innovation and Employment reviewing options for improving culture and conduct in financial institutions in New Zealand. However, we are concerned about the scope of the proposed duties on financial institutions and directors in the options paper. These need to be carefully considered and imposed only to the extent necessary.

The IoD also strongly opposes the introduction of director personal liability where an entity breaches a duty as this is a disproportionate response to the issues identified. This proposal has the potential to seriously undermine the overall strength of corporate governance in New Zealand and may have adverse effects and unintended consequences, including deterring qualified and experienced directors from serving on boards of financial institutions.