The Negative Impact of Additional Legislation on Corporate Stewardship

Many jurisdictions worldwide have reacted to the global financial crisis by implementing new or improved corporate legislative requirements. These would impact upon company directors and audit committee members. This study examines the attitudes of Australian members of these two groups to nine United Kingdom proposed amendments to corporate legislation. Both groups were predominantly opposed to additional legislation (failing to see how it could improve current stewardship) and indicated they would be less comfortable in their current roles. The implications are significant. Additional legislation, although well intentioned, may have negative impacts on stewardship, as requirements may deter good corporate citizens from retaining or seeking office.