Crown Entities Act 2004

Establishment and governance of Crown entities - Crown entity companies - Collective duties of board

94: 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."

When you are on a board of a Crown entity company, you have duties to the shareholding Ministers. These duties are called collective duties and are outlined in sections 92 and 93. You owe these duties to the shareholding Ministers.

If the board does not comply with its collective duties, some or all of the board members can be removed from office. However, this does not apply to a member if they did not know about the breach or if they took all reasonable steps to prevent it.

You are not liable for a breach of collective duty, except you can be removed from office. This section does not affect other reasons for removing a member from office or section 156 of the Companies Act 1993, which is about removing a company director.

If you breach a collective duty, you may still be liable under other laws for what you did or did not do. You can also still apply for a court order under the Companies Act 1993.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM330336.


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"Crown entity companies must follow rules for their subsidiaries"


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95: Duty to comply with this Act and entity's Act, or

"Crown entity members must follow the rules in this Act and their own Act."

Part 2Establishment and governance of Crown entities
Crown entity companies: Collective duties of board

94Accountability for collective board duties

  1. The duties of the board and members of a Crown entity company under sections 92 and 93 (collective duties) are duties owed to the shareholding Ministers.

  2. If a board does not comply with any of its collective duties, all or any of the members may be removed from office.

  3. However, subsection (2) does not apply to a member 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. A member is not liable for a breach of a collective duty under this Act, except for being removed from office as provided for in subsection (2).

      2. This section does not affect any other ground for removing a member from office or section 156 of the Companies Act 1993 (which relates to the process for removal of a company director).

      3. Subsection (4) does not affect—

      4. 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 the Companies Act 1993.