The Financial Markets Authority is warning directors to be open and front foot the disclosure of problems as stress goes on business in coming months.
"At this point honestly no one expects people to know what's coming or even understand the impact of what's already happened", said FMA chief executive Rob Everett.
"We're encouraging directors to be willing to point to those uncertainties and lay them out for investors so people can understand what they are thinking."
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Those that were open and proactive about disclosure would find investors and regulators forgiving, he said.
"Directors need to be brave and auditors need to be brave."
"I do think regulators will be forgiving as long as boards and companies are clear about what's really driving their anxiety."
Everett said he expected the worst was still to come in terms of company failures.
Compared to the Global Financial Crisis (GFC) of 2008 there were areas where New Zealand was much better placed, he said.
The reforms put in place after the GFC meant banking and finance sectors were stronger.
The GFC was really about finance sector and speculative investments in property going in the wrong direction, he said.
But this crisis was hitting a wider group of businesses and more company collapses and failures were likely over a longer time frame.
"This is going to be a much broader war of attrition," Everett said.
"The GFC was very alarming to those in the finance system … you could see that system about to break down. This is a much broader economic reset and we don't yet know what it will look like in the end."
The challenge for a lot of boards would be looking out six months to two years and trying to work out what the pandemic had done to their business models, he said.
"This is when the best directors come to the fore and a lot of it will be down to bravery about making clear what's uncertain for them and their business model."
It would also be important that boards and auditors and regulators were "seen to be doing the right thing".
There was a range of difficult areas for company directors which had been exacerbated by the crisis.
"One is continuous disclosure obligations and the need to assess whether there is material change they should announce before they get to year end," Everett said.
"Optics" would be really important as stress went on.
"Boards need to be thinking about things like buy-backs and dividends and [their own] trading in the company's stock," he said.
"You really have to be whiter than white in a period where everything is moving around so much."
The FMA had been busy through the lockdown but had not seen a significant spike in scams or frauds.
"In some areas like KiwiSaver and insurance we've seen huge call volumes," Everett said.
"There's a lot of anxiety from people about whether what they've put their money into, or the premiums they've paid, are going to deliver what they're expecting."
That had dropped off slightly as the markets had bounced back.
"But this is not going to go away and will quite likely get worse I think before it gets better."
Everett expected a prolonged period of low interest rates, and low returns on equities and other asset classes, would lead to a resurgence of less orthodox investment schemes.
"We'll see a big push into Bitcoin at some point I expect.
"Our job is to make sure everybody is operating to the standard they should be, so someone who invests in the market can see that there's a natural cycle of success and failure," he said.
"This will be a very exacerbated period of pressure that will cause more failures than normal."
But many of those failures would be unavoidable given the economic shock and therefore "perfectly above board and appropriate".
"We have to get our balance right with the director community. To make sure they feel they can be brave about the stuff that looks really tough and really awkward," Everett said.
"Nonetheless we're ready to go if we see things that on the face of it don't feel right to us."