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Company Law — Lecture 11. Types of directors Board composition in New Zealand’s largest companies Appointment, resignation, removal and disqualification of directors How boards operate in practice. Types of directors. Companies must have at least one director Executive directors
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Company Law — Lecture 11 • Types of directors • Board composition in New Zealand’s largest companies • Appointment, resignation, removal and disqualification of directors • How boards operate in practice
Types of directors • Companies must have at least one director • Executive directors • chief executive officer/managing director • others (eg finance director) • Non-executive directors • definition of “independence” • Chairperson • Governing director • Nominee director • Alternate director • De facto director
Types of directors (cont) • Shadow director • Standard Chartered Bank of Australia v Antico • Kuwait Asia Bank case • Dairy Containers Ltd v NZI Bank • Professional advisers • Shareholders as directors
Appointment of directors • Who can be appointed? • a natural person • someone who consents • minimum of 18 years old • not disqualified
How appointed? • New companies • directors named in application for incorporation • Existing companies • by ordinary resolution • each director to be voted on individually
Resignation and removal of directors • Removal by shareholders • s 151 of the Companies Act 1993 by ordinary resolution of shareholders • meeting notice to specify purpose • check constitution for alternative procedure • Removal by court • s 174(2) on application of shareholder • oppressive, unfairly discriminatory or unfairly prejudicial conduct
Disqualification of directors • Under the Companies Act 1955 • offences • court order • prohibition by Registrar of Companies • Under the Companies Act 1993 • offences (s 382) • court disqualification (s 383) • by Registrar of Companies (s 385)
Automatic disqualification • Bankruptcy • Mental incapacity
Proceedings of the board • Who can call a meeting? • Notice requirements • Quorum • Decision-making • Use of technology • schedule 3, Companies Act 1993 • check the company’s constitution
Delegation of board powers • Section 130 delegation to • committee of directors • single director • Employees • Audit Committee • Remuneration Committee • Delegation to CEO
Directors’ rights to information • Section 191 of the Companies Act 1993 • inspection of records • prevention