When you legally let corporate bosses care about the environment, it actually makes it easier for them to get away with corruption.
April 2, 2026
Original Paper
Section 131(5) of the Companies Act 1993: A Problem of Lack of Accountability
SSRN · 6502720
The Takeaway
New laws intended to promote 'social good' often give directors a perfect legal smokescreen for self-serving transactions. Because they can now legally justify a bad business decision by claiming it benefits a vague 'environmental' or 'social' goal, they become effectively immune to shareholder accountability.
From the abstract
<div> This article discusses whether s 131(5) of the Companies Act 1993 (New Zealand) adversely <span>impacts on the accountability of directors. </span><span>Section 131(1) sets out the fundamental duty of directors to act in the best interests of the company. </span><span>Section 131(5) provides that “in considering the best interests of a company … a director may </span><span>consider matters other than the maximisation of profit (for example, environmental, social and </span><span>governance