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National Library of New Zealand Cataloguing-in-Publication Data
Schenone, Silvana.
Duties and responsibilities of directors and company secretaries in New Zealand / Silvana Schenone. 4th ed.
Previous ed.: Duties and responsibilities of directors and company secretaries in New Zealand / by Andrew Borrowdale. 2003.
Includes index.
ISBN 978-0-86475-908-5
1. Directors of corporationsLegal status, laws, etc.New Zealand. 2. Corporation secretariesLegal status, laws etc.New Zealand. 3. Corporation lawNew Zealand. I. Borrowdale, Andrew.Duties and responsibilities of directors and company secretaries in New Zealand. II. CCH New Zealand Limited. III. Title.
346.9306642dc 22
2011 CCH New Zealand Limited
Published by CCH New Zealand Limited
First published January 1989
This edition published October 2011
All rights reserved. No part of this work covered by copyright may be reproduced or copied in any form or by any means (graphic, electronic or mechanical, including photocopying, recording, recording taping, or information retrieval systems) without the written permission of the publisher.
About Chartered Secretaries New Zealand Inc
Chartered Secretaries New Zealand Inc (CSNZ) is a leading professional organisation committed to advancing best practice in governance, risk management, corporate compliance, enterprise and economic development, financial interpretation, shareholder and stakeholder relations and managing the secretariat.
CSNZ is dedicated to provide leadership in these core values to all sectors in the community and is committed to provide leading advocacy, education and examinations to advance the best international practices and standards.
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Foreword
The catastrophic business failures of the past decade in developed Western economies have caused distress and hardship on an unprecedented scale. Major corporations have failed, banks and institutions have collapsed, significant numbers have lost their jobs, economies are out of balance, and governments are now undertaking massive bailouts at the taxpayers expense. This process has been labelled the Global Financial Crisis GFC. But who is to take responsibility for all of this?
Directors are charged with the duty of setting the policies and direction of the entities that elect them, and of ensuring they are prudently and efficiently structured and managed they are accountable for all outcomes. Business failure is ultimately the responsibility of directors. At no time in our commercial history has the role of the company director been so carefully scrutinised.
New case law precedents on directors duties and liabilities in New Zealand, Australia and elsewhere will create a platform for a new understanding of the responsibilities and liabilities of directors.
This fourth edition of Duties and Responsibilities of Directors and Company Secretaries in New Zealand, revised by Silvana Schenone, a Partner at Minter Ellison Rudd Watts, is a timely reminder for directors and their advisers, corporate executives, compliance professionals and business managers of their significant obligations. Stakeholders have never been so interested in the conduct of corporate affairs, and CCH is to be commended for bringing an update of this authoritative publication to the business community.
Duties and Responsibilities of Directors and Company Secretaries in New Zealand is recommended for all who advance lawful and responsible corporate citizenship in this country.
Bruce A. Butler
Executive Officer
Chartered Secretaries New Zealand Inc
Auckland, New Zealand
October 2011
Preface
When I was asked to collaborate with CCH on this book, I was fortunate to have Andrew Borrowdales previous edition to start with, and I am very grateful for his thorough treatment. Developments since the last edition of the book have however been significant. Not only have we seen changes in the legislation over the period, but also there have been significant developments in the case law and in the regulators approach towards stricter standards of corporate governance.
Today, no director should be unaware of R v Moses, Doolan & Young (one of the Nathans Finance cases) and the Australian Securities and Investments Commission v Healey (the Centro case) cases. These decisions confirm the need for directors to take an active role in the exercise of their duties. These cases also establish that although directors can rely on professional advice, they cannot abdicate their responsibilities to their advisers.
In light of the above and other changes occurring in the last few years, an updated review of the law surrounding directors duties and responsibilities and the role of company secretaries in New Zealand was essential.
The law is stated as at 8 July 2011. However, due to its relevance to the subject matter of the book, some important case law released after that date has also been included.
Silvana Schenone
October 2011
CCH Acknowledgements
CCH New Zealand Limited wishes to thank the following who contributed to and supported this publication:
Managing Director: Matthew Sullivan
Director, Books: Jonathan Seifman
Publisher, Books: Andrew Campbell
Product Manager: Dione Kimpton
Editor: Joshua Smith
Production Team Leader: Yeong Wai Heng
Production Editor:
