Can the US Import "Sunlight" from New Zealand? An Assessment of New Zealand's Model for Corporate Financial Disclosure

Abstract

The New Zealand Companies Office requires businesses to disclose certain details of their operations to the public in order to curb financial abuses and facilitate economic development. In the US the Securities and Exchange Commission operates a similar kind of corporate disclosure program to shine "sunlight" on corporate activity. This report examines several elements of New Zealand's model for corporate financial disclosure and assesses the desirability of adopting those elements in the US regulatory regime.The report outlines major issues facing US disclosure operations and outlines reasons for US policy makers to consider approaches taken by New Zealand. The report then investigates those approaches including (1) a service-oriented organizational design separated in a systematic manner from legal policy work and enforcement work (2) a self-funded financial structure based on the "user pays" principle and (3) an information technology architecture based on principles of design transparency data interoperability code standardization and functional reusability. The report examines these areas in some detail and then assesses certain risks that New Zealand may face with its particular model. Based on this assessment the report then concludes by laying out specific recommendations for improvements in US corporate financial disclosure operations.