Pork Industry Board Act 1997

Schedule 1
Provisions applying to directors of Board

s 15

1 Duty of directors to act in good faith and to best attain object of Board
  • A director, when exercising powers or performing duties, must act in good faith and as the director believes will best attain the object of the Board.

2 Exercise of powers in relation to employees
  • (1) Nothing in clause 1 limits the power of a director to make provision for the benefit of employees of the Board in connection with the Board's ceasing to carry on the whole or part of its affairs.

    (2) In subclause (1),—

    Board includes a subsidiary of the Board; and

    employees includes former employees and the dependants of employees or former employees; but does not include an employee or former employee who is or was a director.

3 Powers to be exercised for proper purpose
  • A director must exercise a power for a proper purpose.

4 Directors to comply with Act
  • A director must not act, or agree to the Board's acting, in a manner that contravenes this Act.

5 Reckless trading
  • A director must not—

    • (a) agree to the affairs of the Board being carried on in a manner likely to create a substantial risk of serious loss to the Board's creditors; or

    • (b) cause or allow the affairs of the Board to be carried on in a manner likely to create a substantial risk of serious loss to the Board's creditors.

6 Duty in relation to obligations
  • A director must not agree to the Board's incurring an obligation unless the director believes at that time on reasonable grounds that the Board will be able to perform the obligation when it is required to do so.

7 Director's duty of care
  • A director, when exercising powers or performing duties as a director, must exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances taking into account, but without limitation,—

    • (a) the nature of the Board; and

    • (b) the nature of the decision; and

    • (c) the position of the director and the nature of the responsibilities undertaken by him or her.

8 Use of information and advice
  • (1) A director, when exercising powers or performing duties as a director, may rely on reports, statements, and financial data and other information prepared or supplied, and on professional or expert advice given, by any of the following persons:

    • (a) an employee of the Board whom the director believes on reasonable grounds to be reliable and competent in relation to the matters concerned:

    • (b) a professional adviser or expert in relation to matters which the director believes on reasonable grounds to be within the person's professional or expert competence:

    • (c) any other director or committee of persons established by the Board (upon which the director did not serve) in relation to matters within the director's or committee's designated authority.

    (2) Subclause (1) applies to a director only if the director—

    • (a) acts in good faith; and

    • (b) makes proper inquiry where the need for inquiry is indicated by the circumstances; and

    • (c) has no knowledge that such reliance is unwarranted.

9 Meaning of interested
  • (1) For the purposes of this schedule, a director is interested in a transaction to which the Board is a party if, and only if, the director—

    • (a) is a party to, or will or may derive a material financial benefit from, the transaction; or

    • (b) has a material financial interest in another party to the transaction; or

    • (c) is a director, officer, or trustee of another party to, or person who will or may derive a material financial benefit from, the transaction, not being a party or person that is a wholly-owned subsidiary of the Board; or

    • (d) is the parent, child, spouse, civil union partner, or de facto partner of another party to, or person who will or may derive a material financial benefit from, the transaction; or

    • (e) is otherwise directly or indirectly materially interested in the transaction.

    (2) For the purposes of this schedule a director is not interested in a transaction to which the Board is a party if the transaction comprises only the giving by the Board of security to a third party which has no connection with the director, at the request of the third party, in respect of a debt or obligation of the Board for which the director or another person has personally assumed responsibility in whole or in part under a guarantee, indemnity, or by the deposit of a security.

    Schedule 1 clause 9(1)(d): amended, on 26 April 2005, by section 7 of the Relationships (Statutory References) Act 2005 (2005 No 3).

10 Disclosure of interest
  • (1) A director must, forthwith after becoming aware of the fact that he or she is interested in a transaction or proposed transaction with the Board, cause to be entered in the interests register and disclose to the board of directors,—

    • (a) if the monetary value of the director's interest is able to be quantified, the nature and monetary value of that interest; or

    • (b) if the monetary value of the director's interest cannot be quantified, the nature and extent of that interest.

    (2) For the purposes of subclause (1), a general notice given to the board of directors to the effect that a director is a shareholder, director, officer or trustee of a person named in the notice and is to be regarded as interested in any transaction that may, after the day on which the notice is given to the board of directors, be entered into by the Board with that person, is a sufficient disclosure of interest in relation to that transaction.

    (3) A failure by a director to comply with subclause (1) does not affect the validity of a transaction entered into by the Board or the director.

    (4) Every director who fails to comply with subclause (1) commits an offence and is liable on conviction to a fine not exceeding $10,000.

    Schedule 1 clause 10(4): amended, on 1 July 2013, by section 413 of the Criminal Procedure Act 2011 (2011 No 81).

11 Avoidance of transactions
  • (1) A transaction entered into by the Board in which a director is interested may be avoided by the Board at any time before the expiration of 3 months after the transaction is disclosed to the board of directors or entered in the interests register.

    (2) A transaction cannot be avoided if the Board receives fair value under it.

    (3) For the purposes of subclause (2), the question whether the Board receives fair value under a transaction is to be determined on the basis of the information known to the Board and to the interested director at the time the transaction is entered into.

    (4) If a transaction is entered into by the Board in the ordinary course of its business and on usual terms and conditions, the Board is presumed to receive fair value under the transaction.

    (5) For the purposes of this clause,—

    • (a) a person seeking to uphold a transaction who knew or ought to have known of the director's interest at the time the transaction was entered into has the onus of establishing fair value; and

    • (b) in any other case, the Board has the onus of establishing that it did not receive fair value.

    (6) A transaction in which a director is interested can be avoided only on the ground of the director's interest in accordance with this clause.

12 Effect on third parties
  • The avoidance of a transaction under clause 11 does not affect the title or interest of a person in or to property which that person has acquired if the property was acquired—

    • (a) from a person other than the Board; and

    • (b) for valuable consideration; and

    • (c) without knowledge of the circumstances of the transaction under which the person referred to in paragraph (a) acquired the property from the Board.

13 Application of clauses 10 and 11 in certain cases
  • Nothing in clauses 10 and 11 applies in relation to—

    • (a) the fixing of any levy by the Board; or

    • (b) remuneration or any other benefit given to a director in his or her capacity as a director; or

    • (c) an indemnity given to or insurance provided for a director in his or her capacity as a director.

14 Interested director may vote
  • Subject to any rules adopted by the Board for the purposes of this clause, a director who is interested in a transaction entered into, or to be entered into, by the Board, may—

    • (a) vote on a matter relating to the transaction; and

    • (b) attend a meeting of the board of directors at which a matter relating to the transaction arises and be included among the directors present at the meeting for the purpose of a quorum; and

    • (c) sign a document relating to the transaction on behalf of the Board; and

    • (d) do any other thing in his or her capacity as a director in relation to the transaction,—

    as if the director were not interested in the transaction.

15 Use of Board information
  • (1) A director who has information in his or her capacity as a director or employee of the Board, being information that would not otherwise be available to him or her, must not disclose that information to any person, or make use of or act on the information, except—

    • (a) for the purposes of the Board; or

    • (b) as required by law; or

    • (c) in accordance with subclause (2); or

    (2) A director may disclose, make use of, or act on the information if—

    • (a) particulars of the disclosure, use, or act in question are entered in the interests register; and

    • (b) the director is first authorised to do so by the board of directors; and

    • (c) the disclosure, use, or act in question will not, or will not be likely to, prejudice the Board.

16 Duties owed to Board
  • The duties of the directors of the Board set out in this schedule are owed to the Board.