1 Do Better Corporate Governance Practices Reduce Risks? Hardjo Koerniadi Auckland University of Technology Private Bag 92006, Auckland, New Zealand Chandrasekhar Krishnamurti University of Southern Queensland Toowoomba, QLD 4350, Australia Alireza Tourani-Rad Auckland University of Technology Private Bag 92006, Auckland, New Zealand Abstract We analyse the impact of firm level corporate governance practices on the riskiness of firms’ stock returns. Using a unique self-constructed corporate governance index, we provide evidence that well-governed New Zealand firms experience lower levels of risk, ceteris paribus. In particular, our results indicate that corporate governance aspects such as board composition, shareholder rights, and disclosure practices are associated with lower levels of risk. Key words: Corporate governance, stock return variability, New Zealand JEL Classification: G30, G32