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Crown Entities Act 2004

Establishment and governance of Crown entities - Statutory entities - Effect of non-compliance with duties

58: Accountability for collective board duties

You could also call this:

"Board members are responsible for working together and following the rules, or they might lose their job."

If you are a member of a statutory entity's board, you have duties to the responsible Minister. These duties are called collective duties and are outlined in sections 49 to 52. You owe these duties to the Minister.

If the board does not comply with its collective duties, some or all of the members can be removed from office, depending on what sections 36 to 42 or the entity's Act say.

But if you did not know about a breach of duty and could not have known, or if you took all reasonable steps to prevent it, you will not be removed from office. Taking reasonable steps does not mean you have to go to court to get an order under section 60.

You are not liable for a breach of collective duty under this Act. However, this does not stop you from being removed from office if the board does not comply with its duties.

This section does not change any other reasons you might be removed from office. Also, just because you are not liable under this Act, it does not mean you cannot be liable under other laws for the same thing, or that you cannot apply for a court order under section 60.

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Part 2Establishment and governance of Crown entities
Statutory entities: Effect of non-compliance with duties

58Accountability for collective board duties

  1. The duties of the board and members of a statutory entity under sections 49 to 52 (collective duties) are duties owed to the responsible Minister.

  2. If a board does not comply with any of its collective duties, all or any of the members may be removed from office (subject to any requirements in sections 36 to 42, or in the entity's Act, that are applicable to the member).

  3. However, subsection (2) does not apply to a member (other than the member of a corporation sole) if—

  4. he or she did not know and could not reasonably be expected to know that the duty was to be or was being breached; or
    1. he or she took all reasonable steps in the circumstances to prevent the duty being breached.

      1. The taking of reasonable steps does not require a member to apply to a court for an order under section 60.

      2. A member is not liable for a breach of a collective duty under this Act.

      3. However, subsection (5) does not limit subsection (2).

      4. This section does not affect any other ground for removing a member from office.

      5. Subsection (5) does not affect—

      6. anything else for which the member may be liable under any other Act or rule of law arising from the act or omission that constitutes the breach; or
        1. the right to apply for a court order under section 60.