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Building Societies Act 1965

Management and administration - Directors and other officers

86: Disclosure of interest by directors

You could also call this:

“Directors must tell others about their business interests”

If you are a director of a building society, you need to tell the other directors if you have any interest in a contract that the society is making or thinking about making. This is called disclosing your interest. You should do this even if your interest is not direct.

When you need to tell the other directors depends on when you become interested in the contract. If it’s a new contract, you should tell them at the meeting where the contract is first discussed. If you become interested after that meeting, you should tell them at the next meeting. If you become interested after the contract is already made, you should tell them at the first meeting after that happens.

You can also give a general notice at a meeting. This means you can tell the other directors that you are part of a specific company or firm, and that you should be seen as interested in any future contracts with that company or firm.

You don’t have to be at the meeting in person to make your declaration. But if you’re not there, you need to make sure your declaration is brought up and read at the meeting.

If you don’t follow these rules, you are breaking the law. These rules don’t change any other laws that might stop directors from having interests in contracts with the society.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM372027.

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Part 7 Management and administration
Directors and other officers

86Disclosure of interest by directors

  1. Subject to the provisions of this section, every director of a society who is in any way, directly or indirectly, interested in a contract or proposed contract with the society shall declare the nature of his or her interest to the board of directors in accordance with this section.

  2. In the case of a proposed contract, the declaration required by this section shall be made at the meeting of the directors at which the question of entering into the contract is taken into consideration or, if the director was not at the date of that meeting interested in the proposed contract, at the next meeting of the directors held after he or she becomes interested in the proposed contract.

  3. Where the director becomes interested in a contract with the society after it is made, such declaration shall be made at the first meeting of the directors held after he or she becomes interested in the contract.

  4. For the purposes of this section, a general notice given by a director, at a meeting of the directors, to the effect that he or she is a member of a specified company or firm, and is to be regarded as interested in any contract that may thereafter be made with that company or firm, shall be a sufficient declaration of interest in relation to any such contract.

  5. A declaration or notice under this section need not be made or given by the director in person at the meeting, if the director takes reasonable steps to ensure that it is brought up and read at the meeting.

  6. A director who fails to comply with the provisions of this section commits an offence against this Act.

  7. Nothing in this section shall prejudice the operation of any rule of law restricting directors of a society from having any interest in contracts with the society.

Compare
  • Building Societies Act 1962 s 73 (UK)