Crown Entities Act 2004

(1) Section 201 comes into force on the day on which this Act receives the Royal assent.
(2) The rest of this Act comes into force on 25 January 2005.

Part 1
Preliminary provisions

3 Purpose

The purpose of this Act is to reform the law relating to Crown entities to provide a consistent framework for the establishment, governance, and operation of Crown entities and to clarify accountability relationships between Crown entities, their board members, their responsible Ministers on behalf of the Crown, and the House of Representatives, and, to that end,—
- (a) to provide for different categories of Crown entities and for each category to have its own framework for governance (including the degree to which the Crown entity is required to give effect to, or be independent of, government policy):
- (b) to clarify the powers and duties of board members in respect of the governance and operation of Crown entities, including their duty to ensure the financial responsibility of the Crown entity:
- (c) to set out reporting and accountability requirements.

4 Application of Acts to Crown entities

(1) The rules for the establishment, governance, operation, and accountability of Crown entities are set out in various Acts of Parliament as follows:
- (a) this Act applies generally to Crown entities:
- (b) a statutory entity is established by or under the entity's Act, and the entity's Act may supplement, or expressly modify or negate, the provisions of this Act for that entity and its Crown entity subsidiaries:
- (c) a Crown entity company is incorporated under the Companies Act 1993 and may also have an entity's Act, and the entity's Act (if any) may supplement, or expressly modify or negate, the provisions of this Act for that company and its Crown entity subsidiaries:
- (d) other Acts (for example, some provisions of the State Sector Act 1988) also apply.
(2) This Act applies to a Crown entity, and prevails over the entity's Act, except to the extent that the entity's Act expressly provides otherwise.
(3) Subsection (2) is subject to sections 5 and 6.

5 Application of this Act to school boards of trustees

(1) The provisions set out in Schedule 3 of this Act and Schedule 5A of the Education Act 1989 apply to school boards of trustees and their Crown entity subsidiaries.
(2) Otherwise this Act does not apply to school boards of trustees and their Crown entity subsidiaries.

6 Application of this Act to tertiary education institutions

(1) The provisions set out in Schedule 4 of this Act and Schedule 13A of the Education Act 1989 apply to tertiary education institutions and their Crown entity subsidiaries.
(2) Otherwise this Act does not apply to tertiary education institutions and their Crown entity subsidiaries.

7 Meaning of Crown entity and categories of Crown entities

(1) In this Act, Crown entity means an entity within one of the following 5 categories:

(a) statutory entities:

What are they?	Definition	Different types
These are bodies corporate that are established by or under an Act	An entity or office named in Schedule 1	Crown agents (which must give effect to government policy when directed by the responsible Minister). These are named in Part 1 of Schedule 1
		Autonomous Crown entities (which must have regard to government policy when directed by the responsible Minister). These are named in Part 2 of Schedule 1
		Independent Crown entities (which are generally independent of government policy). These are named in Part 3 of Schedule 1

(b) Crown entity companies:
What are they? Definition
These are companies incorporated under the Companies Act 1993 that are wholly owned by the Crown

A company named in Schedule 2

What are they?		Definition
These are companies incorporated under the Companies Act 1993 that are wholly owned by the Crown		A company named in Schedule 2

What are they?		Definition
These are companies incorporated under the Companies Act 1993 that are controlled by Crown entities		A company that, under sections 5 to 8 (except section 5(3) of the Companies Act 1993),— (a) is a subsidiary of another Crown entity; or (b) would be a subsidiary of other Crown entities if those Crown entities were treated as 1 entity (with their rights, entitlements, and interests in relation to the company taken together) for the purposes of those sections

What are they?

Definition

These are companies incorporated under the Companies Act 1993 that are controlled by Crown entities

A company that, under sections 5 to 8 (except section 5(3) of the Companies Act 1993),—

(a) is a subsidiary of another Crown entity; or

(b) would be a subsidiary of other Crown entities if those Crown entities were treated as 1 entity (with their rights, entitlements, and interests in relation to the company taken together) for the purposes of those sections

(d) school boards of trustees:

What are they?		Definition
These are boards that are bodies corporate constituted under the Education Act 1989 (including correspondence schools)		A body that is a board of trustees constituted under Part 9 of the Education Act 1989 and includes a board of a school designated as a correspondence school by the Minister of Education under section 152 of the Education Act 1989

(e) tertiary education institutions:

What are they?		Definition
These are tertiary institutions (for example, colleges of education, polytechnics, specialist colleges, universities, or wananga) that are bodies corporate established under the Education Act 1989		An institution established under Part 14 of the Education Act 1989

(2) The words in brackets in subsection (1) about the effect of the different types of statutory entities are intended only as a guide.

8 Meaning of parent Crown entity and Crown entity subsidiary

(1) A Crown entity (A) is a parent Crown entity or parent of another Crown entity (B) if—
- (a) A is a statutory entity or Crown entity company or school board of trustees or tertiary education institution; and
- (b) B is a subsidiary of A under the definition of Crown entity subsidiaries in column 2 of section 7(1)(c).
(2) A Crown entity (B) is a Crown entity subsidiary of another Crown entity (A) if B is a subsidiary of A under the definition of Crown entity subsidiaries in column 2 of section 7(1)(c).

9 Power to amend Schedules 1 and 2

(1) The Governor-General may, by Order in Council, amend Schedule 1 or Schedule 2 to—
- (a) add to Schedule 1 the name of an entity established by or under an Act of Parliament:
- (b) add to Schedule 2 the name of a Crown entity company:
- (c) omit the name of a Crown agent from Part 1 of Schedule 1 and add that name to another Part of that schedule:
- (d) omit the name of an autonomous Crown entity from Part 2 of Schedule 1 and add that name to Part 3 of that schedule:
- (e) omit the name of an entity or company and substitute another name in recognition of a change in the entity's or company's name:
- (f) omit the name of an entity or company in recognition of the entity's dissolution or the company's removal from the register under the Companies Act 1993.
(2) An Order in Council cannot be made under this section in relation to a school board of trustees or a tertiary education institution.
(3) An Order in Council cannot be made under this section to add a Crown entity subsidiary to Schedule 1 or Schedule 2.

10 Interpretation

(1) In this Act, unless the context otherwise requires,—
appoint includes,—
- (a) in relation to a member, appointment of the member in accordance with the method in section 28 or, in relation to a chairperson or deputy chairperson, appointment in accordance with Schedule 5; or
- (b) appointment by any other person, by election, by designation, by co-option, or by any other method in or under the entity's Act or constitution
autonomous Crown entity means a statutory entity named in Part 2 of Schedule 1
board—
- (a) means, in relation to a statutory entity that has a board or other governing body under the entity's Act (by whatever name called), members of the entity's board who number not less than the required quorum acting together as a board; and
- (b) means, in relation to a statutory entity that does not have a board or other governing body under the entity's Act, persons who constitute the entity and who number not less than the required quorum acting together; and
- (c) means, in relation to a corporation sole, the person who is the sole member of that entity; and
- (d) in relation to a Crown entity company and Crown entity subsidiary, has the same meaning as in section 127 of the Companies Act 1993; and
- (e) means, in relation to a school board of trustees, the persons who comprise that board and who number not less than the required quorum acting together; and
- (f) means, in relation to a tertiary education institution, the members of its Council who number not less than the required quorum acting together
borrow has the meaning set out in section 136
class of outputs or class has the meaning set out in section 136
committee means a committee appointed under clause 14 of Schedule 5
committee member means a member of a committee
Crown agent means a statutory entity named in Part 1 of Schedule 1
Crown entity has the meaning set out in section 7(1)
Crown entity company has the meaning set out in column 2 of section 7(1)(b)
Crown entity group has the meaning set out in section 136
Crown entity subsidiary has the meaning set out in section 8(2)
direction means a direction given by a Minister under this Act or the entity's Act to an entity or to a member or employee or office holder of an entity (for example, a direction on government policy, a direction to perform an additional function, or a direction relating to the entity's statement of intent)
employee—
- (a) includes the chief executive of a Crown entity (by whatever name called) other than for the process of determining terms and conditions in sections 97(i) and 116; and
- (b) has, for the purposes of sections 120 to 125, the meaning set out in section 126
entity's Act means,—
- (a) in relation to a statutory entity,—
  - (i) the Act by or under which the statutory entity is established; and
  - (ii) if relevant, any other Act that expressly provides for the functions, powers, or duties of the entity (other than this Act); and
- (b) in relation to a Crown entity company, the Act (if any) that specifically provides for the formation or shareholding of the Crown entity company by Ministers or for its governance, operation, or accountability (but does not include a generic Act, like the Companies Act 1993 or this Act); and
- (c) in relation to a Crown entity subsidiary, the entity's Act of its parent Crown entity; and
- (d) in relation to a school board of trustees or a tertiary education institution, the Education Act 1989 or the Education Act 1964
excluded act or omission, for the purposes of sections 120 to 126, has the meaning set out in section 126
fees framework means the framework determined by the Government from time to time for the classification and remuneration of statutory and other bodies in which the Crown has an interest, including statutory entities and their subsidiaries and tertiary education institutions
financial year has the meaning set out in section 136
function,—
- (a) in relation to a statutory entity, has the meaning set out in section 14:
- (b) in relation to any other Crown entity—
  - (i) means a function (by whatever name called) to be performed by the Crown entity under the entity's Act or another Act; and
  - (ii) includes any additional function given to the entity by a Minister under another Act in accordance with section 112 of this Act; and
  - (iii) includes, in relation to a Crown entity company or a Crown entity subsidiary, its rights, powers, duties, and obligations under its constitution and the Companies Act 1993 or any functions given to it by a Minister under its constitution in accordance with section 112 of this Act; and
  - (iv) includes, in relation to a Crown entity that does not have an entity's Act, any functions provided for in its statement of intent; and
  - (v) includes any functions that are incidental and related to, or consequential on, its functions in subparagraphs (i) to (iv)
generally accepted accounting practice has the meaning set out in section 136
independent Crown entity means a statutory entity named in Part 3 of Schedule 1
interested or interests has the meaning set out in section 62
member—
- (a) means, in relation to a statutory entity that has a board or other governing body under the entity's Act, a person who occupies the position of member of the board of the entity (by whatever name called); and
- (b) means, in relation to a statutory entity that does not have a board or other governing body under the entity's Act, a person who is one of the persons who constitute that entity; and
- (c) means, in relation to a corporation sole, the person who is the sole member of that entity; and
- (d) means, in relation to a Crown entity company and Crown entity subsidiary, a director within the meaning of section 126(1)(a) of the Companies Act 1993; and
- (e) means, in relation to a school board of trustees, a trustee; and
- (f) means, in relation to a tertiary education institution, a member of its Council; and
- (g) has, for the purposes of sections 120 to 125, the meaning set out in section 126; and
- (h) except to the extent that the entity's Act otherwise provides, includes any person appointed or elected under another Act as an alternate member, a deputy member, a co-opted member, a designate for a member, or an acting member
Minister means a Minister of the Crown
multi-parent subsidiary means a Crown entity that is a Crown entity subsidiary only because 2 or more Crown entities are treated as 1 entity under paragraph (b) of the definition of the term Crown entity subsidiaries in column 2 of section 7(1)(c)
natural person act has the meaning set out in section 24
output agreement means an agreement referred to in section 170
outputs has the meaning set out in section 136
parent Crown entity or parent has the meaning set out in section 8(1)
responsible Minister means,—
- (a) in relation to a Crown entity company, the Minister of Finance and the other shareholding Minister or Ministers; and
- (b) in relation to any other Crown entity (other than a Crown entity subsidiary or a tertiary education institution),—
  - (i) a Minister who is expressly specified, in an Act or a warrant or with the authority of the Prime Minister, to be a Minister who is for the time being responsible for the exercise and performance of the functions, powers, and duties of a responsible Minister in relation to the entity; or
  - (ii) if subparagraph (i) does not apply, a Minister who is for the time being responsible, under the authority of an Act or a warrant or with the authority of the Prime Minister, for the administration of the Act, or Part of the Act, by or under which the entity is established; and
- (c) in relation to a Crown entity subsidiary, a responsible Minister of the parent Crown entity of that Crown entity subsidiary
school board of trustees has the meaning set out in section 7(1)(d)
shareholding Ministers means the Ministers who hold shares in a Crown entity company under section 79
statutorily independent function means, in relation to a Crown entity or a member, employee, or office holder of a Crown entity, any matter in respect of which the entity's Act provides that—
- (a) the function must be carried out independently; or
- (b) Ministers of the Crown may not give directions
statutory entity has the meaning set out in column 2 of section 7(1)(a)
tertiary education institution has the meaning set out in section 7(1)(e).
(2) In this Act, unless the context otherwise requires, references to a person performing functions and exercising powers, or carrying out responsibilities, includes carrying out duties.

11 Act binds the Crown

This Act binds the Crown.

12 Outline of main Crown entity provisions

(1) Part 2 deals with the establishment and governance of statutory entities (subpart 1), Crown entity companies (subpart 2), and Crown entity subsidiaries (subpart 3), and covers matters such as status, powers, members, duties, delegations, and conflicts of interests, to the extent that those matters are applicable to each of those categories of Crown entity.
(2) Part 3 deals with the operation of Crown entities and with matters such as—
- (a) what directions the Government can give to Crown entities:
- (b) to what extent members, employees, committee members, and office holders are immune from liability in legal proceedings or may be reimbursed for costs incurred in settling claims or in proceedings:
- (c) employees and compliance with the requirements of being a good employer and providing equal employment opportunities:
- (d) how Crown entities deal with third parties.
(3) Part 4 deals with the accountability of Crown entities to Parliament and the Crown, and sets out rules on planning, financial statements, reporting, acquisition of securities, borrowing, derivatives, payment of net surpluses to the Crown, capital charges, and taxation.
(4) Part 5 contains miscellaneous, transitional, and savings provisions.
(5) Schedules 1 and 2 list the Crown entities in the various categories.
(6) Schedules 3 and 4 list the provisions that apply to school boards of trustees and tertiary education institutions and their Crown entity subsidiaries.
(7) Schedule 5 sets out the board procedure for statutory entities (other than corporations sole).
(8) Subsections (1) to (7) are only a guide to the general scheme and effect of this Act.

Part 2
Establishment and governance of Crown entities

Subpart 1—Statutory entities

Establishment of statutory entity

13 Establishment of statutory entity

A statutory entity is established by or under an Act other than this Act.

14 Functions

(1) The functions of a statutory entity are—
- (a) the functions set out in the entity's Act; and
- (b) if the entity's Act gives the responsible Minister power to add functions, any other functions that the responsible Minister may direct the entity to perform in accordance with that Act and section 112 of this Act; and
- (c) any functions that are incidental and related to, or consequential on, its functions set out in paragraphs (a) and (b).
(2) In performing its functions, a statutory entity must act consistently with its objectives.

15 Status of statutory entity

A statutory entity—
- (a) is a body corporate; and
- (b) is accordingly a legal entity separate from its members, office holders, employees, and the Crown; and
- (c) continues in existence until it is dissolved by an Act.

16 Core things statutory entities can do

A statutory entity may do anything authorised by this Act or the entity's Act.

17 Other things statutory entities can do

(1) A statutory entity may do anything that a natural person of full age and capacity may do.
(2) Subsection (1) applies except as provided in this Act or another Act or rule of law.

18 Acts must be for purpose of functions

A statutory entity may do an act under section 16 or section 17 only for the purpose of performing its functions.

Validity of acts

19 Acts in breach of statute are invalid

(1) An act of a statutory entity is invalid, unless section 20 applies, if it is—
- (a) an act that is contrary to, or outside the authority of, an Act; or
- (b) an act that is done otherwise than for the purpose of performing its functions.
(2) Subsection (1) does not limit any discretion of a court to grant relief in respect of a minor or technical breach.

20 Some natural person acts protected

(1) Section 19, or any rule of law to similar effect, does not prevent a person dealing with a statutory entity from enforcing a transaction that is a natural person act unless the person dealing with the entity had, or ought reasonably to have had, knowledge—
- (a) of an express restriction in an Act that makes the act contrary to, or outside the authority of, the Act; or
- (b) that the act is done otherwise than for the purpose of performing the entity's functions.
(2) A person who relies on subsection (1) has the onus of proving that that person did not have, and ought not reasonably to have had, the knowledge referred to in that subsection.
(3) A statutory entity must report, in its annual report, each transaction that the entity has performed in the year to which the report relates that was invalid under section 19 but enforced in reliance on this section.
(4) For the avoidance of doubt, this section does not affect any person's other remedies (for example, remedies in contract) under the general law.

21 Limits on protection of natural person acts

Section 20 does not limit—
- (a) section 60 (which provides for injunctions to require or restrain acts); or
- (b) the board of the statutory entity bringing an action against a member who voted for or otherwise authorised the act for breach of his or her individual duties as a member; or
- (c) a member who voted for or otherwise authorised the act being removed from office for breach of the individual duties of members or the collective duties of the board; or
- (d) an application, in accordance with the law, for judicial review; or
- (e) section 69.

22 Acts that are not in best interests of statutory entity

It is irrelevant to the validity of an act that the act is not, or would not be, in the best interests of a statutory entity.
Compare: 1993 No 105 s 17(3)

23 Dealings between statutory entities and other persons

(1) A statutory entity may not assert against a person dealing with the entity that—
- (a) a person held out by the statutory entity to be a member, office holder, chief executive, employee, or agent of the statutory entity (as the case may be)—
  - (i) has not been duly appointed in that capacity or has ceased to be appointed in that capacity; or
  - (ii) does not have the authority to exercise a power which, given the nature of the statutory entity, a person appointed to that capacity customarily has authority to exercise; or
  - (iii) does not have the authority to exercise a power that the statutory entity holds him or her out as having; or
- (b) a document issued on behalf of the entity by a member, office holder, chief executive, employee, or agent of the entity with actual or usual authority to issue the document is not valid or genuine.
(2) However, a statutory entity may assert any of those matters if the person dealing with the statutory entity had, or ought reasonably to have had, knowledge of the matter.
(3) Nothing in this section affects a person's right to apply, in accordance with the law, for judicial review.
Compare: 1993 No 105 s 18

24 Interpretation

In sections 15 to 23, unless the context otherwise requires,—
act includes a transfer of property, rights, or interests to or by a statutory entity
do includes—
- (a) to do an act; and
- (b) to have a capacity; and
- (c) to have or exercise a power, right, or privilege
natural person act—
- (a) means an act that a natural person of full age and capacity can do (whether or not the act is something that is also authorised by an Act); and
- (b) includes entry into a contract for, or relating to,—
  - (i) acquisition of securities or borrowing:
  - (ii) a derivative transaction:
  - (iii) the purchase, leasing, or sale of, or other dealings with, property:
  - (iv) the employment, or engagement of the services, of a person
person dealing—
- (a) means the other party to the transaction, if the act of the statutory entity is a transaction; and
- (b) includes a person who has acquired property, rights, or interests from a statutory entity.

Role and accountability of members

25 Board's role

(1) The board is the governing body of a statutory entity, with the authority, in the entity's name, to exercise the powers and perform the functions of the entity.
(2) All decisions relating to the operation of a statutory entity must be made by, or under the authority of, the board in accordance with this Act and the entity's Act.

26 Accountability of members to responsible Minister

(1) Members of a statutory entity must comply with—
- (a) the board's collective duties (in sections 49 to 52); and
- (b) their individual duties as members (in sections 53 to 57); and
- (c) any directions applicable to the entity under subpart 1 of Part 3.
(2) Members are accountable to the responsible Minister for performing their duties as members.

Responsible Minister's role

27 Responsible Minister's role

(1) The role of the responsible Minister is to oversee and manage the Crown's interests in, and relationship with, a statutory entity and to exercise any statutory responsibilities given to the Minister, including functions, and powers—
- (a) in relation to the appointment and removal of members under this subpart:
- (b) to determine the remuneration of some members under this Part:
- (c) in relation to the giving of directions to the entity under subpart 1 of Part 3:
- (d) to review the operations and performance of the entity under subpart 3 of Part 3:
- (e) to request information from the entity under subpart 3 of Part 3, whether for a review or otherwise:
- (f) to participate in the process of setting and monitoring the entity's strategic direction and targets under Part 4:
- (g) in relation to other matters in this Act or another Act.
(2) This section does not limit another Minister's relationship with the statutory entity under any other authority.

Appointment, removal, and conditions of members

28 Method of appointment of members

(1) A member of a statutory entity is appointed by—
- (a) the responsible Minister, in the case of a member of a Crown agent or autonomous Crown entity; or
- (b) the Governor-General, on the recommendation of the responsible Minister, in the case of a member of an independent Crown entity.
(2) The appointment must be made by written notice to the member (with a copy to the entity).
(3) The notice must—
- (a) state the date on which the appointment takes effect which must not be earlier than the date on which the notice is received; and
- (b) state the term of the appointment; and
- (c) be published by the responsible Minister in the Gazette as soon as practicable after being given.

29 Criteria for appointments or recommendations by responsible Minister

(1) A responsible Minister of a statutory entity must appoint, or recommend the appointment of, members under section 28 in accordance with any criteria for members and any process for appointment under this or another Act.
(2) A responsible Minister—
- (a) may only appoint or recommend a person who, in the responsible Minister's opinion, has the appropriate knowledge, skills, and experience to assist the statutory entity to achieve its objectives and perform its functions; and
- (b) subject to subsection (1), in appointing or recommending an appointment, must take into account the desirability of promoting diversity in the membership of Crown entities.

30 Qualifications of members

(1) A natural person who is not disqualified by this section may be a member of a statutory entity.
(2) The following persons are disqualified from being members:
- (a) a person who is an undischarged bankrupt:
- (b) a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, or the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993:
- (c) a person who is subject to a property order under the Protection of Personal and Property Rights Act 1988:
- (d) a person in respect of whom a personal order has been made under that Act that reflects adversely on the person's—
  - (i) competence to manage his or her own affairs in relation to his or her property; or
  - (ii) capacity to make or to communicate decisions relating to any particular aspect or aspects of his or her personal care and welfare:
- (e) a person who has been convicted of an offence punishable by imprisonment for a term of 2 years or more, or who has been sentenced to imprisonment for any other offence, unless that person has obtained a pardon, served the sentence, or otherwise suffered the penalty imposed on the person:
- (f) a member of Parliament:
- (g) a person who is disqualified under another Act.
(3) However, subsection (2)(f) does not disqualify a person who is elected (rather than appointed) to office as a member under any other Act.
Section 30(2)(b): substituted, on 25 October 2006, by section 25 of the Securities Amendment Act 2006 (2006 No 46).

31 Requirements before appointment

(1) Before a person is appointed as a member of a statutory entity, the person must—
- (a) consent in writing to being a member; and
- (b) certify that he or she is not disqualified from being a member; and
- (c) disclose to the responsible Minister the nature and extent (including monetary value, if quantifiable) of all interests that the person has at that time, or is likely to have, in matters relating to the statutory entity.
(2) The board of the entity must notify the responsible Minister of a failure to comply with subsection (1)(c) as soon as practicable after becoming aware of the failure.

32 Term of office of members

(1) A member of a statutory entity holds office for—
- (a) 3 years or any shorter period stated in the notice of appointment, in the case of a member of a Crown agent or autonomous Crown entity; or
- (b) 5 years or any shorter period stated in the notice of appointment, in the case of a member of an independent Crown entity.
(2) A member may be reappointed.
(3) A member continues in office despite the expiry of his or her term of office until—
- (a) the member is reappointed; or
- (b) the member's successor is appointed; or
- (c) the appointor informs the member by written notice (with a copy to the entity) that the member is not to be reappointed and no successor is to be appointed at that time.
(4) This section is subject to section 45.

33 Elected, co-opted, etc, members

(1) Sections 28, 29, 31(1)(a) and (b), and 32 do not apply to a member of a statutory entity who is appointed under the entity's Act by election, co-option, or designation, or by any method other than appointment by a Minister or the Governor-General.
(2) Section 31(1)(c) does not apply to a member of a statutory entity who is appointed (whether or not by nomination) by any method other than appointment by a Minister or the Governor-General if, under another Act, the member is required to disclose interests in matters relating to the statutory entity before being appointed as a member.

34 Validity of members' acts

The acts of a person as a member, chairperson, or deputy chairperson of a statutory entity are valid even though—
- (a) a defect existed in the appointment of the person; or
- (b) the person is or was disqualified from being a member; or
- (c) the occasion for the person acting, or for his or her appointment, had not arisen or had ended.

35 Validity of appointments

(1) The appointment of a person as a member, chairperson, or deputy chairperson of a statutory entity is not invalid only because a defect existed in the appointment of the person.
(2) This section does not apply to—
- (a) a defect in the qualifications for appointment of a member, chairperson, or deputy chairperson; or
- (b) a member of a statutory entity who is appointed under the entity's Act by election.

36 Removal of members of Crown agents

(1) The responsible Minister may, at any time and entirely at his or her discretion, remove a member of a Crown agent from office.
(2) The removal must be made by written notice to the member (with a copy to the entity).
(3) The notice must state the date on which the removal takes effect, which must not be earlier than the date on which the notice is received.
(4) The responsible Minister must notify the removal in the Gazette as soon as practicable after giving the notice.
(5) This section does not apply to a member appointed by election under the entity's Act.

37 Removal of members of autonomous Crown entities

(1) The responsible Minister may, at any time and for any reason that in the Minister's opinion justifies the removal, remove a member of an autonomous Crown entity from office.
(2) The removal must be made by written notice to the member (with a copy to the entity).
(3) The notice must—
- (a) state the date on which the removal takes effect, which must not be earlier than the date on which the notice is received; and
- (b) state the reasons for the removal.
(4) The responsible Minister must notify the removal in the Gazette as soon as practicable after giving the notice.
(5) This section does not apply to a member appointed by election under the entity's Act.

38 Removal of elected members of Crown agents and autonomous Crown entities

(1) The responsible Minister may, at any time for just cause, remove a member appointed by election to a Crown agent or autonomous Crown entity from office.
(2) The removal must be made by written notice to the member (with a copy to the entity).
(3) The notice must—
- (a) state the date on which the removal takes effect which must not be earlier than the date on which the notice is received; and
- (b) state the reasons for the removal.
(4) The responsible Minister must notify the removal in the Gazette as soon as practicable after giving the notice.

39 Removal of members of independent Crown entities

(1) The Governor-General may, at any time for just cause, on the advice of the responsible Minister given after consultation with the Attorney-General, remove a member of an independent Crown entity from office.
(2) The removal must be made by written notice to the member (with a copy to the entity).
(3) The notice must—
- (a) state the date on which the removal takes effect which must not be earlier than the date on which the notice is received; and
- (b) state the reasons for the removal.
(4) The responsible Minister must notify the removal in the Gazette as soon as practicable after the notice is given.

40 Just cause

In sections 38 and 39, just cause includes misconduct, inability to perform the functions of office, neglect of duty, and breach of any of the collective duties of the board or the individual duties of members (depending on the seriousness of the breach).

41 Process for removal

A responsible Minister may remove, or advise the removal of, a member, as the case may be, with as little formality and technicality, and as much expedition, as is permitted by—
- (a) the principles of natural justice; and
- (b) a proper consideration of the matter; and
- (c) the different requirements of this Act in relation to the different types of statutory entity.

42 Judges serving as members

(1) This section applies to a Judge who is a member of a statutory entity, except as otherwise provided in the entity's Act.
(2) The Judge may be removed as a member in accordance with the removal provisions of this Act for a breach of the board's collective duties, but only if all of the other members are being removed for the same breach at the same time.
(3) That removal does not affect his or her tenure as a Judge.
(4) The Judge may not be removed as a member in accordance with any other removal provisions of this Act.
(5) The Judge may be removed as a member at any time under the general law that applies to removal from office as a Judge.

43 No compensation for loss of office

A member of a statutory entity is not entitled to any compensation or other payment or benefit relating to his or her ceasing, for any reason, to hold office as a member.

44 Resignation of members

(1) A member of a statutory entity may resign from office by written notice to the responsible Minister (with a copy to the entity) signed by the member.
(2) The resignation is effective on receipt by the responsible Minister of the notice or at any later time specified in the notice.

45 Members ceasing to hold office

A member of a statutory entity ceases to hold office if he or she—
- (a) resigns in accordance with section 44; or
- (b) is removed from office in accordance with sections 36 to 39 or any other enactment; or
- (c) becomes disqualified from being a member under any of paragraphs (a) to (g) of section 30(2); or
- (d) otherwise ceases to hold office in accordance with any enactment.

46 Member of corporation sole not to hold concurrent office

The member of a corporation sole must not, without the prior approval of the responsible Minister, hold any office of trust or profit or engage in any occupation for reward outside his or her responsibilities as a member of the corporation sole.

Remuneration and expenses

47 Remuneration of members

(1) A member of a statutory entity is entitled to receive, from the funds of the entity, remuneration not within section 48 for services as a member at a rate and of a kind determined by—
- (a) the responsible Minister, in the case of a member of a Crown agent or autonomous Crown entity, in accordance with the fees framework; or
- (b) the Remuneration Authority in accordance with the Remuneration Authority Act 1977, in the case of—
  - (i) a member of an independent Crown entity; or
  - (ii) a member of a Crown agent or autonomous Crown entity that is a corporation sole.
(2) The following office holders are not entitled to any remuneration for services as a member of the statutory entity in addition to his or her remuneration in respect of that office:
- (a) a Judge:
- (b) a member of Parliament:
- (c) an employee (including a chief executive) within any part of the State services who is acting as a member of the statutory entity as a representative of all or any part of the State services.

48 Expenses of members

A member of a statutory entity is entitled, in accordance with the fees framework, to be reimbursed, out of the funds of the entity, for actual and reasonable travelling and other expenses incurred in carrying out his or her office as a member.

Collective duties of board

49 Entity must act consistently with objectives, functions, statement of intent, and output agreement

The board of a statutory entity must ensure that the entity acts in a manner consistent with its objectives, functions, current statement of intent, and output agreement (if any) under Part 4.

50 Functions must be performed efficiently, effectively, and consistently with spirit of service to public

The board of a statutory entity must ensure that the statutory entity performs its functions efficiently and effectively and in a manner consistent with the spirit of service to the public.

51 Entity must operate in financially responsible manner

The board of a statutory entity must ensure that the entity operates in a financially responsible manner and, for this purpose, that it—
- (a) prudently manages its assets and liabilities; and
- (b) endeavours to ensure—
  - (i) its long-term financial viability; and
  - (ii) that it acts as a successful going concern.

52 Subsidiaries and other interests

The board of a statutory entity must ensure that the entity complies with sections 96 to 101.

Individual duties of members

53 Duty to comply with this Act and entity's Act

A member of a statutory entity must not contravene, or cause the contravention of, or agree to the entity contravening, this Act or the entity's Act.

54 Duty to act with honesty and integrity

A member of a statutory entity must, when acting as a member, act with honesty and integrity.

55 Duty to act in good faith and not at expense of entity's interests

A member of a statutory entity must, when acting as a member, act in good faith and not pursue his or her own interests at the expense of the entity's interests.

56 Duty to act with reasonable care, diligence, and skill

A member of a statutory entity must, when acting as a member, exercise the care, diligence, and skill that a reasonable person would exercise in the same circumstances, taking into account (without limitation)—
- (a) the nature of the statutory entity; and
- (b) the nature of the action; and
- (c) the position of the member and the nature of the responsibilities undertaken by him or her.

57 Duty not to disclose information

(1) A member of a statutory entity who has information in his or her capacity as a member 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, that information, except—
- (a) in the performance of the entity's functions; or
- (b) as required or permitted by law; or
- (c) in accordance with subsection (2); or
- (d) in complying with the requirements for members to disclose interests.
(2) A member may disclose, make use of, or act on the information if—
- (a) the member is first authorised to do so by the board or, in the case of a corporation sole, by the responsible Minister; and
- (b) the disclosure, use, or act in question will not, or will be unlikely to, prejudice the entity.

Effect of non-compliance with duties

58 Accountability 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—
- (a) 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
- (b) he or she took all reasonable steps in the circumstances to prevent the duty being breached.
(4) The taking of reasonable steps does not require a member to apply to a court for an order under section 60.
(5) A member is not liable for a breach of a collective duty under this Act.
(6) However, subsection (5) does not limit subsection (2).
(7) This section does not affect any other ground for removing a member from office.
(8) Subsection (5) does not affect—
- (a) 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
- (b) the right to apply for a court order under section 60.

59 Accountability for individual duties

(1) The duties of the members of a statutory entity under sections 53 to 57 (individual duties) are duties owed to the responsible Minister and the statutory entity.
(2) If a member does not comply with his or her individual duties, that member 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) A statutory entity may bring an action against a member for breach of any individual duty.
(4) Except as provided in subsections (2) and (3), a member is not liable for a breach of an individual duty under this Act.
(5) This section does not affect any other ground for removing a member from office.
(6) Subsection (4) does not affect—
- (a) 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
- (b) the right to apply for a court order under section 60.

60 Court actions requiring or restraining board or members

(1) A responsible Minister or a member of a statutory entity may apply to a court for an order—
- (a) restraining the board or a member of the board from engaging in conduct that would contravene any requirement under this Act or the entity's Act; and
- (b) granting any consequential relief.
(2) A responsible Minister may apply to a court for an order—
- (a) requiring the board or a member to take any action that is required to be taken under this Act or the entity's Act:
- (b) granting any consequential relief.
(3) The court may make an order on the application subject to the following rules:
- (a) an order may be made only if it is just and equitable to do so:
- (b) no order may be made in respect of conduct that has been completed.
(4) The court may, at any time before the final determination of an application under this section, make as an interim order any order that it is empowered to make as a final order.
(5) This section is subject to section 113.

Reliance on information and advice

61 When members may rely on certain information and advice

(1) A member, when acting as a member, may rely on reports, statements, 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 statutory entity whom the member 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 that the member believes on reasonable grounds to be within the person's professional or expert competence:
- (c) any other member or a committee on which the member did not serve in relation to matters within the member's or committee's designated authority.
(2) A member, when acting as a member, may rely on reports, statements, financial data, and other information supplied by the Crown.
(3) This section applies to a member only if the member—
- (a) acts in good faith; and
- (b) makes proper inquiry if the need for inquiry is indicated by the circumstances; and
- (c) has no knowledge that the reliance is unwarranted.

Conflict of interest disclosure rules

62 When interests must be disclosed

(1) In this section, matter means—
- (a) a statutory entity's performance of its functions or exercise of its powers; or
- (b) an arrangement, agreement, or contract made or entered into, or proposed to be entered into, by the entity.
(2) A person is interested in a matter if he or she—
- (a) may derive a financial benefit from the matter; or
- (b) is the spouse, civil union partner, de facto partner, child, or parent of a person who may derive a financial benefit from the matter; or
- (c) may have a financial interest in a person to whom the matter relates; or
- (d) is a partner, director, officer, board member, or trustee of a person who may have a financial interest in a person to whom the matter relates; or
- (e) may be interested in the matter because the entity's Act so provides; or
- (f) is otherwise directly or indirectly interested in the matter.
(3) However, a person is not interested in a matter—
- (a) only because he or she is a member or an officer of a wholly-owned subsidiary of the entity or of a subsidiary that is owned by the entity together with another parent Crown entity or entities; or
- (b) because he or she receives an indemnity, insurance cover, remuneration, or other benefits authorised under this Act or another Act; or
- (c) if his or her interest is so remote or insignificant that it cannot reasonably be regarded as likely to influence him or her in carrying out his or her responsibilities under this Act or another Act; or
- (d) if an entity's Act provides that he or she is not interested, despite this section.
Section 62(2)(b): amended, on 26 April 2005, by section 7 of the Relationships (Statutory References) Act 2005 (2005 No 3).

63 Obligation to disclose interest

(1) A member who is interested in a matter relating to the statutory entity must disclose details of the interest in accordance with section 64 as soon as practicable after the member becomes aware that he or she is interested.
(2) A general notice of an interest in a matter relating to the statutory entity, or in a matter that may in future relate to the entity, that is disclosed in accordance with section 64 is a standing disclosure of that interest for the purposes of this section.
(3) A standing disclosure ceases to have effect if the nature of the interest materially alters or the extent of the interest materially increases.

64 Who disclosure of interests must be made to

The member must disclose details of the interest in an interests register kept by the statutory entity and to—
- (a) the chairperson or, if there is no chairperson or if the chairperson is unavailable or interested, the deputy or temporary chairperson; or
- (b) the responsible Minister, if there is neither a chairperson nor a deputy or temporary chairperson, or if both the chairperson and the deputy or temporary chairperson are unavailable or interested.

65 What must be disclosed

The details that must be disclosed under section 64 are—
- (a) the nature of the interest and the monetary value of the interest (if the monetary value can be quantified); or
- (b) the nature and extent of the interest (if the monetary value cannot be quantified).

66 Consequences of being interested in matter

A member who is interested in a matter relating to a statutory entity—
- (a) must not vote or take part in any discussion or decision of the board or any committee relating to the matter, or otherwise participate in any activity of the entity that relates to the matter; and
- (b) must not sign any document relating to the entry into a transaction or the initiation of the matter; and
- (c) is to be disregarded for the purpose of forming a quorum for that part of a meeting of the board or committee during which a discussion or decision relating to the matter occurs or is made.

67 Consequences of failing to disclose interest

(1) The board must notify the responsible Minister of a failure to comply with section 63 or section 66, and of the acts affected, as soon as practicable after becoming aware of the failure.
(2) A failure to comply with section 63 or section 66 does not affect the validity of an act or matter.
(3) However, subsection (2) does not limit the right of any person to apply, in accordance with law, for judicial review.

68 Permission to act despite being interested in matter

(1) The chairperson of a statutory entity may, by prior written notice to the board, permit 1 or more members, or members with a specified class of interest, to do anything otherwise prohibited by section 66, if the chairperson is satisfied that it is in the public interest to do so.
(2) The permission may state conditions that the member must comply with.
(3) The deputy or temporary chairperson may give the permission if there is no chairperson, or if the chairperson is unavailable or interested.
(4) The responsible Minister may give the permission if there is neither a chairperson nor a deputy or temporary chairperson, or if both the chairperson and the deputy or temporary chairperson are unavailable or interested.
(5) The permission may be amended or revoked in the same way as it may be given.
(6) The board must disclose an interest to which a permission relates in its annual report, together with a statement of who gave the permission and any conditions or amendments to, or revocation of, the permission.

69 Entity may avoid certain acts done in breach of conflict of interest rules

(1) A statutory entity may avoid a natural person act done by the entity in respect of which a member was in breach of section 66.
(2) However, the act—
- (a) may be avoided only within 3 months of the affected act being disclosed to the responsible Minister under section 67; and
- (b) cannot be avoided if the entity receives fair value in respect of the act.
(3) An act in which a member is interested can be avoided on the ground of the member's interest only in accordance with this section.
Compare: 1993 No 105 s 141(1), (2), (6)

70 What is fair value

(1) The entity is presumed to receive fair value in respect of an act that is done by the entity in the ordinary course of its business and on usual terms and conditions.
(2) Whether an entity receives fair value in respect of an act must be determined on the basis of the information known to the entity and to the interested member at the time the act is done.
Compare: 1993 No 105 s 141(3), (4)

71 Onus of proving fair value

(1) A person seeking to prevent an act being avoided, and who knew, or ought reasonably to have known, of the member's interest at the time the act was done, has the onus of establishing fair value.
(2) In any other case, the entity has the onus of establishing that it did not receive fair value.
Compare: 1993 No 105 s 141(5)

72 Effect of avoidance on third parties

The avoidance of an act under section 69 does not affect the title or interest of a person to or in property that that person has acquired if the property was acquired—
- (a) from a person other than the entity; and
- (b) for valuable consideration; and
- (c) without knowledge of the circumstances of the act under which the person referred to in paragraph (a) acquired the property from the entity.

Delegation

73 Ability to delegate

(1) The board of a statutory entity may delegate any of the functions or powers of the entity or the board, either generally or specifically, to any of the following persons by resolution and written notice to the person or persons:
- (a) a member or members:
- (b) the chief executive or any other employee or employees, or office holder or holders, of the entity:
- (c) a committee:
- (d) any other person or persons approved by the entity's responsible Minister:
- (e) any class of persons comprised of any of the persons listed in paragraphs (a) to (d):
- (f) a Crown entity subsidiary of the statutory entity.
(2) Subsection (1) does not apply to any functions or powers specified in the entity's Act as not being capable of delegation.
(3) Subsection (1)(f) does not apply to any of the statutory entity's statutorily independent functions.
(4) The board must not delegate the general power of delegation.
Compare: 1988 No 20 ss 28, 41(1); 1993 No 105 s 130

74 Powers of delegate

(1) A delegate to whom any functions or powers of a statutory entity or board are delegated—
- (a) may, unless the delegation provides otherwise, perform the function or exercise the power in the same manner, subject to the same restrictions, and with the same effect as if the delegate were the entity or the board; and
- (b) may delegate the function or power only—
  - (i) with the prior written consent of the board; and
  - (ii) subject to the same restrictions, and with the same effect, as if the subdelegate were the delegate.
(2) A delegate who purports to perform a function or exercise a power under a delegation—
- (a) is, in the absence of proof to the contrary, presumed to do so in accordance with the terms of that delegation; and
- (b) must produce evidence of his or her authority to do so, if reasonably requested to do so.
Compare: 1988 No 20 s 41(2), (3), (4)

75 Effect of delegation on entity or board

No delegation in accordance with this Act or the entity's Act—
- (a) affects or prevents the performance of any function or the exercise of any power by the entity or the board; or
- (b) affects the responsibility of the board for the actions of any delegate acting under the delegation; or
- (c) is affected by any change in the membership of the board or of any committee or class of persons or by any change in an office holder, chief executive, or employee.
Compare: 1988 No 20 ss 41(7), 42(2)

76 Revocations of delegations

(1) A delegation under section 73 may be revoked at will by—
- (a) resolution of the board and written notice to the delegate; or
- (b) any other method provided for in the delegation.
(2) A delegation under section 74(1)(b) may be revoked at will by written notice of the delegate to the subdelegate.
Compare: 1988 No 20 s 42

Miscellaneous provisions relating to board

77 Vacancies in membership of board

The powers and functions of a statutory entity are not affected by any vacancy in the membership of its board.

78 Board procedure

The provisions set out in Schedule 5 govern the proceedings of the board of a statutory entity (other than a corporation sole).

Subpart 2—Crown entity companies

Formation and shareholding of Crown entity companies

79 Formation and acquisition of shares in Crown entity companies

(1) Shares in a Crown entity company may be subscribed for, or otherwise acquired, on behalf of the Crown only by 2 or more Ministers.
(2) One of those shareholding Ministers must be the Minister of Finance.
(3) Each shareholding Minister of a Crown entity company must always hold the same number of shares in the Crown entity company as each other shareholding Minister of that Crown entity company.
(4) This section does not limit the Crown's ability to subscribe for, or otherwise acquire, shares in a company that is not a Crown entity company.
(5) This section applies also to a company that is being formed with the intention of becoming a Crown entity company, despite the fact that the company is not yet named in Schedule 2.

80 Restrictions relating to shares in Crown entity companies

(1) No Minister may—
- (a) sell or otherwise dispose of any shares in a Crown entity company held in the Minister's name; or
- (b) permit shares in a Crown entity company to be allotted or issued to any person other than a shareholding Minister.
(2) However, despite subsection (1)(a), a Minister may dispose of shares—
- (a) as part of a reconstruction or merger in which the Crown's interest in the shares of the company is not diluted; or
- (b) if an Act authorises the transfer of ownership of shares of a Crown entity company.
(3) Subsection (1) does not apply to redeemable preference shares that—
- (a) are not convertible into shares of any other class; and
- (b) do not confer any rights to vote at any general meeting of the company.
Compare: 1986 No 124 s 11

81 Crown entity company must have constitution stating it is Crown entity

A Crown entity company must have a constitution, and the constitution must contain a statement to the effect that the company is a Crown entity for the purposes of this Act.

82 Constitution must be presented to House of Representatives

A shareholding Minister of a Crown entity company must present the constitution of the company, and any changes to the constitution and any replacement constitution, to the House of Representatives as soon as practicable after the date on which the company becomes a Crown entity company, or the date of the change or replacement, whichever is applicable.

83 Shares to be held by person holding office as Minister

(1) Shares in a Crown entity company held in the name of a person described as a Minister are to be held by the person for the time being holding the office of that Minister.
(2) It is not necessary to complete or register a transfer of shares in a Crown entity company held in the name of a person described as a Minister upon a change in the person holding that office.
(3) Subsection (2) applies despite any other enactment or rule of law.

84 Appointment of representative of shareholding Minister

(1) A shareholding Minister of a Crown entity company may, by written notice to a Crown entity company, authorise (on the terms specified in the notice) a person to act as the shareholding Minister's representative at any or all of the meetings of shareholders of the company or of any class of those shareholders.
(2) Any person authorised under subsection (1) is entitled to exercise the same powers on behalf of the shareholding Minister as the shareholding Minister could exercise if present in person at the meeting or meetings.
(3) This section applies despite any other enactment or rule of law.

85 Interface with Companies Act 1993 and other Acts

(1) Section 178 of the Companies Act 1993 (which relates to information for shareholders and, among other things, sets out some reasons for which a company can refuse to provide information) does not entitle a Crown entity company to refuse to provide information that must be provided under this Act or otherwise made available to any person under the Official Information Act 1982.
(2) Section 161(1)(b) of the Companies Act 1993 (which relates to payment to a director or former director of compensation for loss of office) does not apply to a Crown entity company.
(3) In all other respects, both the Companies Act 1993 and this Act apply to a Crown entity company in respect of a matter, but anything done under one Act counts towards compliance with the other Act.

Role and accountability of members

86 Board's role

(1) In accordance with section 128(1) of the Companies Act 1993, the business and affairs of a Crown entity company must be managed by, or under the direction or supervision of, the board of the company.
(2) The board of a Crown entity company must exercise its duties under section 128(1) of that Act in accordance with this Act and the entity's Act (if any).
(3) Subsection (2) does not limit section 128(3) of the Companies Act 1993 (which relates to modifications, exceptions, or limitations contained in that Act or in the company's constitution).

87 Accountability of members to shareholding Ministers

(1) Members of a Crown entity company must comply with—
- (a) the board's collective duties (in sections 92 and 93); and
- (b) the individual duty (in section 95); and
- (c) any directions applicable to the company under subpart 1 of Part 3.
(2) Members are accountable to the shareholding Ministers for performing their duties as members under this Act.
(3) This section does not affect individual directors' duties that are owed to the company under Part 8 of the Companies Act 1993.

Shareholding Ministers' role

88 Shareholding Ministers' role

(1) The role of the shareholding Ministers is to oversee and manage the Crown's interests in, and relationship with, a Crown entity company and to exercise any statutory responsibilities given to the shareholding Ministers, including functions and powers—
- (a) to appoint and remove members by shareholder resolution in accordance with the Companies Act 1993; and
- (b) to review the operations and performance of the company under subpart 3 of Part 3; and
- (c) to request information from the entity under subpart 3 of Part 3, whether for a review or otherwise; and
- (d) to participate in the process of setting and monitoring the company's strategic direction and targets under Part 4; and
- (e) to do other things under this Act or another Act or the company's constitution.
(2) The shareholding Ministers may give directions to the company only if expressly authorised to do so by this Act or another Act.
(3) This section does not limit another Minister's relationship with the Crown entity company under any other authority.

Appointment and removal of members

89 Criteria for appointments by shareholding Minister

(1) A shareholding Minister of a Crown entity company must appoint members in accordance with any criteria for members, and any process for appointment, set out under this Act or another Act or the company's constitution.
(2) A shareholding Minister—
- (a) may only appoint a person who, in the shareholding Minister's opinion, has the appropriate knowledge, skills, and experience to ensure the sound management of the Crown entity company and to assist the company to achieve its objectives and perform its functions; and
- (b) subject to subsection (1), in appointing, must take into account the desirability of promoting diversity in the membership of Crown entities.
(3) A member of Parliament is disqualified from being a member of a Crown entity company.

90 Members must disclose interests before appointment

(1) Before a person is appointed as a member of a Crown entity company, the person must disclose to the shareholding Ministers the nature and extent (including monetary value, if quantifiable) of all interests that the person has at that time, or is likely to have, in matters relating to the Crown entity company.
(2) The board of the Crown entity company must notify the shareholding Ministers of a failure to comply with subsection (1) as soon as practicable after becoming aware of the failure.
(3) Sections 139 and 140 of the Companies Act 1993 do not apply until after the member is appointed.

91 No compensation for removal from office

A member of a Crown entity company is not entitled to any compensation or other payment or benefit relating to his or her ceasing for any reason to hold office as a member.

Collective duties of board

92 Duty to act consistently with objectives, functions, statement of intent, and output agreement

The board of a Crown entity company must ensure that the company acts in a manner consistent with its objectives, functions, current statement of intent, and current output agreement (if any).

93 Subsidiaries

A Crown entity company must ensure that the company complies with sections 96 to 101.

94 Accountability 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—
- (a) 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
- (b) he or she took all reasonable steps in the circumstances to prevent the duty being breached.
(4) 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).
(5) 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).
(6) Subsection (4) does not affect—
- (a) 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
- (b) the right to apply for a court order under the Companies Act 1993.

Individual duty of members

95 Duty to comply with this Act and entity's Act

(1) A member of a Crown entity company must not contravene, or cause or agree to the company's contravention of, this Act or the entity's Act (if any).
(2) This duty is owed to the responsible Minister and the Crown entity company.
(3) If a member does not comply with the duty, that member may be removed from office.
(4) A Crown entity company may bring action against a member for breach of the duty.
(5) A member is not liable for a breach of the duty, except for being removed from office as provided for in subsection (3) or in an action brought under subsection (4).
(6) Subsection (5) does not affect 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.

Subpart 3—Crown entity subsidiaries

Formation and shareholding of Crown entity subsidiaries

96 Acquisition of subsidiaries

A Crown entity must ensure that the entity acquires or forms a Crown entity subsidiary only,—
- (a) in the case of a Crown entity that is a Crown entity subsidiary, after written notice to its parent Crown entity:
- (b) in the case of another Crown entity, after written notice to the responsible Ministers.

97 Subsidiaries: rules applying to all Crown entities

A Crown entity (the parent) must ensure, to the extent of its powers, that each of its Crown entity subsidiaries—
- (a) does not do anything that the parent itself does not have the power to do; and
- (b) acts consistently with the parent's objectives and current statement of intent (to the extent they relate to the subsidiary); and
- (c) exercises its powers only for the purpose of performing, or assisting the parent to perform, the parent's functions; and
- (d) does not contravene this Act or the entity's Act (if any) to the extent that it relates to a subsidiary; and
- (e) complies with a direction given to the parent (to the extent that it relates to the subsidiary); and
- (f) does not pay directors of the subsidiary any compensation or other payment or benefit, on any basis, for ceasing for any reason to hold office; and
- (g) does not perform any of the parent's statutorily independent functions; and
- (h) has a constitution and that the constitution contains a statement to the effect that the company is a Crown entity for the purposes of this Act; and
- (i) complies with the statutory requirements as to employees that apply to the parent; and
- (j) does not have a member of Parliament as a member.

98 Subsidiaries: rules applying only to statutory entities

(1) A statutory entity (the parent) must ensure, to the extent of its powers, that each of its Crown entity subsidiaries—
- (a) performs its functions efficiently and effectively and in a manner consistent with the spirit of service to the public; and
- (b) pays remuneration to members of the subsidiary only at a rate and of a kind determined by the parent in accordance with the fees framework or after consulting with the responsible Minister; and
- (c) complies with the requirements as to chief executives set out in section 117 in the same way as the parent must do (but for this purpose, references to the responsible Minister in section 117 must be read as references to the parent).
(2) The requirements of this section are additional to those in section 97.

99 Application to multi-parent subsidiaries

If there is any doubt as to how section 97, section 98, or sections 161 to 164 apply to a multi-parent subsidiary, the responsible Ministers of the 2 or more parents of a multi-parent subsidiary must agree on the restrictions and obligations that the sections require.

100 Acquisition of shares or interests in companies, trusts, and partnerships, etc

(1) A Crown entity must ensure that the entity does not—
- (a) acquire shares in a company that gives the entity substantial influence in or over that company; or
- (b) acquire an interest in any partnership, joint venture, or other association of persons, or an interest in a company other than in its shares; or
- (c) settle, or be or appoint a trustee of, a trust,—
other than—
- (d) after written notice to its parent Crown entity (in the case of a Crown entity subsidiary) or to the responsible Ministers (in the case of any other Crown entity); and
- (e) in accordance with the procedures and conditions contained in its statement of intent or specified by the responsible Ministers; and
- (f) for the purpose of the Crown entity carrying out any of its functions, and acting consistently with its objectives, under any Act and its constitution (if any).
(2) Substantial influence, in relation to a company, means the capacity to affect substantially either the financial or operating policies, or both, of the company.
(3) This section does not apply if the entity acquires a Crown entity subsidiary (in which case section 96 applies).

101 Corporation sole may not acquire interests in bodies corporate

(1) A corporation sole must not acquire or form a Crown entity subsidiary.
(2) A corporation sole must not, without the prior written approval of its responsible Minister, otherwise—
- (a) form or hold any shares or interests in any body corporate or in a partnership, joint venture, or other association of persons; or
- (b) settle, or be or appoint a trustee of, a trust.

102 Interface with Companies Act 1993 and other Acts

(1) Section 178 of the Companies Act 1993 (which relates to information for shareholders and, among other things, sets out some reasons for which a company can refuse to provide information) does not entitle a Crown entity subsidiary to refuse to provide information that must be provided under this Act or otherwise made available to any person under the Official Information Act 1982.
(2) Section 161(1)(b) of the Companies Act 1993 (which relates to payment to a director or former director of compensation for loss of office) does not apply to Crown entity subsidiaries.
(3) In all other respects, both the Companies Act 1993 and this Act apply to a Crown entity subsidiary in respect of a matter, but anything done under one Act counts towards compliance with the other Act.

Part 3
Operation of Crown entities

Subpart 1—Provisions applying generally to Crown entities

Directions on government policy to statutory entities and Crown entity companies

103 Power to direct Crown agents to give effect to government policy

(1) The responsible Minister of a Crown agent may direct the entity to give effect to a government policy that relates to the entity's functions and objectives.
(2) Sections 114 and 115 apply to the direction.
(3) This section is subject to section 113.

104 Power to direct autonomous Crown entities to have regard to government policy

(1) The responsible Minister of an autonomous Crown entity may direct the entity to have regard to a government policy that relates to the entity's functions and objectives.
(2) Sections 114 and 115 apply to the direction.
(3) A responsible Minister of an autonomous Crown entity may not direct the entity to give effect to a government policy unless specifically provided in another Act.
(4) This section is subject to section 113.

105 No power to direct independent Crown entities or Crown entity companies on government policy unless provided in another Act

A responsible Minister of an independent Crown entity or a Crown entity company may not direct the entity or company to have regard to or to give effect to a government policy unless specifically provided in another Act.

106 Directions to members and office holders of entities

(1) A responsible Minister may, if an Act provides for any member or office holder of an entity to do something, direct that person to have regard to, or to give effect to, a government policy, as the case may be, in the same way that the Minister could give a direction to the entity if the Act required the entity to do the act itself.
(2) Sections 114 and 115 apply to the direction.

107 Whole of government directions

(1) The Minister of State Services and the Minister of Finance may jointly direct Crown entities to comply with specified requirements for the purpose of both—
- (a) supporting a whole of government approach; and
- (b) either directly or indirectly, improving public services.
Example:
A direction may be given requiring that all Crown entities comply with e-government requirements to improve public services.
(2) The direction may be given only—
- (a) to 1 or more categories of Crown entities (for example, to all statutory entities, all Crown entity companies, or all school boards of trustees); or
- (b) to 1 or more types of statutory entity (for example, to all Crown agents).
(3) No direction may be given under this section to Crown entity subsidiaries.

108 Process for giving whole of government directions

(1) The Ministers must, before giving a direction under section 107, to the extent that the Ministers consider necessary in the circumstances,—
- (a) consult with those entities to which the direction is proposed to apply; and
- (b) consult with persons that the Ministers consider are representative of the interests of persons likely to be substantially affected by the proposed direction.
(2) The Ministers must, as soon as practicable after giving a direction under section 107,—
- (a) notify the entities to which the direction will apply that the direction has been given and will come into force subject to section 109; and
- (b) present the direction to the House of Representatives.
(3) This section is subject to section 113.

109 House of Representatives may resolve to disapply whole of government direction

A whole of government direction given under section 107 comes into force 15 sitting days after it is presented to the House of Representatives unless the House of Representatives resolves, in that period, to disapply the direction.

110 Obligation to give effect to direction

Every Crown entity within the category or type of Crown entities to which the direction is given must give effect to the direction as soon as it comes into force under section 109.

111 Publication of whole of government direction

(1) As soon as practicable after a direction comes into force under section 109, the Ministers who gave it must ensure that it is published in the Gazette and on the Internet.
(2) If a direction does not come into force, the Ministers who gave it must, as soon as practicable, notify the entities to which the direction would have applied that the direction has been disapplied and will not come into force.

112 Power to add functions if authorised by entity's Act or constitution

(1) If an Act, or a Crown entity company's constitution, gives the responsible Minister power to add to the functions of a Crown entity, the Minister may direct the entity to perform any additional function that is so added and that is consistent with the entity's objectives.
(2) Sections 114 and 115 apply to the direction.

113 Safeguarding independence of Crown entities

(1) This Act does not authorise a Minister to direct a Crown entity, or a member, employee, or office holder of a Crown entity,—
- (a) in relation to a statutorily independent function; or
- (b) requiring the performance or non-performance of a particular act, or the bringing about of a particular result, in respect of a particular person or persons.
(2) This Act does not change the way in which the following functions must be carried out under an entity's Act:
- (a) statutorily independent functions in an entity's Act; or
- (b) functions that are carried out by a person acting judicially in relation to a particular matter in accordance with an entity's Act.
(3) This section applies to all Ministerial directions given under this Act, including whole of government directions.

Government directions to Crown entities

114 Crown entities must comply with directions given under statutory power of direction

(1) A Crown entity must, in performing its functions, comply with—
- (a) any direction given to it under a power of direction in this Act or another Act; and
- (b) any whole of government direction given to it under section 107.
(2) Comply, in this section, means to give effect to the direction or to have regard to the direction, as the context requires.
(3) Subsection (1) applies—
- (a) except as provided in section 113; and
- (b) to a direction given by a Minister, only if it is in writing and signed by a Minister entitled to give the direction.

115 Procedure for all Ministerial directions

(1) A Minister who proposes to give a direction to a Crown entity under this Act, the entity's Act, or another Act must consult with the Crown entity before giving the direction to the entity.
(2) As soon as practicable after giving the direction, a Minister must—
- (a) publish it in the Gazette; and
- (b) present a copy of it to the House of Representatives.
(3) The direction may be amended, revoked, or replaced in the same way as it may be given.
(4) This section does not apply to whole of government directions given under section 107.
(5) This section does not apply, in the case of directions given under another Act, if the other Act contains a procedure for giving directions.

Employees

116 Employment of employees

(1) If the Governor-General, by Order in Council, requires it, a Crown entity to which the order applies must not agree to terms and conditions of employment in a collective employment agreement, or an amendment to those terms and conditions, without—
- (a) consulting the State Services Commissioner; and
- (b) having regard to the recommendations the Commissioner makes to the Crown entity within a reasonable time of being consulted.
(2) An Order in Council may relate to—
- (a) all statutory entities and Crown entity companies, categories or types of statutory entities or Crown entity companies, or specific statutory entities or Crown entity companies:
- (b) all employees or classes of employees of those employers.
(3) A failure to comply with this section does not invalidate the acts of an employee of a Crown entity.
(4) This section does not limit section 117.

117 Employment of chief executive

(1) A statutory entity must not agree to the terms and conditions of employment for a chief executive, or to an amendment of those terms and conditions, without—
- (a) consulting the State Services Commissioner; and
- (b) if the proposed terms and conditions or amendment do not comply with any guidance issued by the State Services Commissioner to 1 or more Crown entities, consulting the responsible Minister.
(2) A statutory entity must have regard to any recommendations that the Commissioner and (if applicable) the responsible Minister makes to it within a reasonable time of being consulted.
(3) A failure to comply with this section does not invalidate the acts of a chief executive of an entity.

118 Crown entity to be good employer

(1) A Crown entity must, if it employs employees,—
- (a) operate a personnel policy that complies with the principle of being a good employer; and
- (b) make that policy (including the equal employment opportunities programme) available to its employees; and
- (c) ensure its compliance with that policy (including its equal employment opportunities programme) and report in its annual report on the extent of its compliance.
(2) For the purposes of this section, a good employer is an employer who operates a personnel policy containing provisions generally accepted as necessary for the fair and proper treatment of employees in all aspects of their employment, including provisions requiring—
- (a) good and safe working conditions; and
- (b) an equal employment opportunities programme; and
- (c) the impartial selection of suitably qualified persons for appointment; and
- (d) recognition of—
  - (i) the aims and aspirations of Māori; and
  - (ii) the employment requirements of Māori; and
  - (iii) the need for involvement of Māori as employees of the entity; and
- (e) opportunities for the enhancement of the abilities of individual employees; and
- (f) recognition of the aims and aspirations and employment requirements, and the cultural differences, of ethnic or minority groups; and
- (g) recognition of the employment requirements of women; and
- (h) recognition of the employment requirements of persons with disabilities.
(3) For the purposes of this section, an equal employment opportunities programme means a programme that is aimed at the identification and elimination of all aspects of policies, procedures, and other institutional barriers that cause or perpetuate, or tend to cause or perpetuate, inequality in respect of the employment of any persons or group of persons.

119 Application of sections 84 to 84B of the State Sector Act 1988

(1) Each Crown entity is an employer in the State services for the purposes of sections 84 to 84B of the State Sector Act 1988.
(2) Sections 84 to 84B of the State Sector Act 1988 apply to the officers and employees of a Crown entity.

Subpart 2—Statutory entities

Protections from liability of members, office holders, and employees

120 Protections from liabilities of statutory entity

A member, office holder, or employee of a statutory entity is not liable for any liability of the entity by reason only of being a member, office holder, or employee.

121 Immunity from civil liability

(1) A member of a statutory entity is not liable, in respect of an excluded act or omission,—
- (a) to the entity, unless it is also a breach of an individual duty under any of sections 53 to 57:
- (b) to any other person.
(2) An office holder or employee is not liable to any person in respect of an excluded act or omission.
(3) Nothing in this section affects—
- (a) the making of an order under section 60:
- (b) the liability of any person that is not a civil liability:
- (c) the right of any person to apply, in accordance with the law, for judicial review.

122 Indemnities in relation to excluded act or omission

(1) A statutory entity may only indemnify a member, office holder, or employee in respect of an excluded act or omission.
(2) An indemnity under subsection (1) is limited to—
- (a) liability for conduct; and
- (b) costs incurred in defending or settling any claim or proceeding relating to that liability.
Compare: 1993 No 105 s 162

123 Insurance for liability of member, office holder, or employee

A statutory entity may effect insurance cover for a member, office holder, or employee of the entity in relation to his or her acts or omissions, except an act or omission that is—
- (a) in bad faith:
- (b) not in the performance or intended performance of the entity's functions.

124 Saving of judicial protections from liability

A Judge who is appointed as a member of a statutory entity has the same immunities and limitations or other protections from liability when acting as a member of that entity as he or she would have as a Judge.

125 Breach of indemnity and insurance limits

(1) A member, office holder, or employee who is indemnified or insured by a statutory entity in breach of this Act must repay to the entity the cost of providing or effecting that indemnity or insurance cover, to the extent that the indemnity or insurance cover exceeds that which could have been provided or effected under this Act.
(2) The entity may recover the amount as a debt due in a court of competent jurisdiction.

126 Definitions for protections from liability

In sections 120 to 125,—
effect insurance includes pay, whether directly or indirectly, the costs of the insurance
employee includes a person who was an employee at any time after the commencement of this Act but who is no longer an employee
entity's functions includes any function that an Act confers separately on a member, office holder, or employee of the entity
excluded act or omission means an act or omission by the member, office holder, or employee in good faith and in performance or intended performance of the entity's functions
indemnify includes relieve or excuse from liability, whether before or after the liability arises, and indemnity has a corresponding meaning
member includes a person who was a member at any time after the commencement of this Act but who is no longer a member
office holder includes a person who was an office holder at any time after the commencement of this Act but who is no longer an office holder.

Dealings with third parties by statutory entities

127 Method of contracting

(1) A contract or other enforceable obligation may be entered into by a statutory entity as provided in this section.
(2) An obligation that, if entered into by an individual, is required to be by deed may be entered into on behalf of a statutory entity in writing, signed under the name of the entity,—
- (a) by 2 or more of its members or, if the entity is a corporation sole, by the sole member; or
- (b) by 1 or more attorneys appointed by the entity in accordance with this Part.
(3) An obligation that, if entered into by an individual, is required to be in writing may be entered into on behalf of a statutory entity in writing by a person acting under the entity's express or implied authority.
(4) An obligation that, if entered into by an individual, is not required to be in writing may be entered into on behalf of a statutory entity in writing or orally by a person acting under the entity's express or implied authority.
(5) This section applies to a contract or other obligation—
- (a) whether or not that obligation was entered into in New Zealand; and
- (b) whether or not the law governing that obligation is the law of New Zealand.

128 Seal

(1) A statutory entity may have a common seal if its board adopts one.
(2) The common seal of a statutory entity (if it has one) must be judicially noticed in all courts and for all purposes.

129 Attorneys

(1) A statutory entity may, by an instrument in writing executed in accordance with section 127(2), appoint a person as its attorney either generally or in relation to a specified matter.
(2) An act of the attorney in accordance with the instrument binds the statutory entity.

130 Address for service

The address for service in respect of a statutory entity is the address of the head office of the entity.

Subpart 3—Miscellaneous provisions

131 Application of Ombudsmen Act 1975 and Official Information Act 1982

Amendment(s) incorporated in the Act(s).

132 Review of Crown entity's operations and performance

(1) A responsible Minister may review the operations and performance of a Crown entity at any time.
(2) This section does not limit powers of review in the State Sector Act 1988 or the Public Audit Act 2001 or under any other Act.
(3) Before a Minister undertakes a review under this section, he or she must—
- (a) consult with the entity on the purpose and nature of the review; and
- (b) consider any submissions made by the entity on the proposed review.
(4) The entity must take all reasonable steps to co-operate with the review.

133 Power to request information

(1) The board of a Crown entity must supply to its responsible Minister any information relating to the operations and performance of the Crown entity that the Minister requests.
(2) The board of a Crown entity must supply to the Minister of Finance any information requested by the Minister in connection with the exercise of his or her powers under Part 4.
(3) This section is subject to section 134.
Compare: 1989 No 44 s 45B(1)

134 Good reasons for refusing to supply requested information

(1) A request for information under section 133 may be refused if—
- (a) the withholding of the information is necessary to protect the privacy of a person (whether or not a natural person or a deceased person); or
- (b) the supply of the information would limit the ability of the Crown entity, or of any of its employees, members, or office holders, to act judicially, or to carry out the statutorily independent functions of the entity, in relation to a particular matter.
(2) The reason in subsection (1)(a) applies only if it is not out-weighed by the Minister's need to have the information in order to discharge the Minister's ministerial duties.
(3) The information cannot be withheld other than for the reasons in subsection (1), and cannot be withheld at all if it could not properly be withheld under the Official Information Act 1982.
(4) Section 178 of the Companies Act 1993 does not entitle a Crown entity company or Crown entity subsidiary to refuse to provide information requested under this subpart.
Compare: 1989 No 44 s 45B(2)

135 Members, office holders, and employees are officials

(1) This section applies to—
- (a) members, office holders, and employees of the following Crown entities:
  - (i) a statutory entity:
  - (ii) a Crown entity company:
  - (iii) a school board of trustees:
  - (iv) a Crown entity subsidiary that is wholly owned by 1 or more Crown entities referred to in subparagraphs (i) to (iii):
- (b) office holders and employees of—
  - (i) a tertiary education institution:
  - (ii) a Crown entity subsidiary that is wholly owned by 1 or more tertiary education institutions or by 1 or more tertiary education institutions and 1 or more Crown entities referred to in paragraph (a)(i) to (iii)
(2) A person to whom this section applies is an official for the purposes of sections 105 and 105A of the Crimes Act 1961.
(3) This section does not limit the meaning of official in section 99 of the Crimes Act 1961.

Part 4
Crown entity reporting and financial obligations

Subpart 1—Interpretation for this Part

136 Interpretation for this Part

(1) In this Part, unless the context otherwise requires,—
borrow,—
- (a) includes entering into hire purchase agreements or agreements that are of the same or a substantially similar nature; and
- (b) includes entering into finance lease arrangements or arrangements that are of the same or a substantially similar nature; and
- (c) includes accepting debt on assignment from other persons; but
- (d) does not include the purchase of goods or services on credit or the obtaining of an advance by the use of a credit card or by a supplier supplying credit for the purchase of goods or services, for a period of 90 days or less from the date the credit card is used or the credit is supplied
class of outputs or class has the meaning set out in section 2(1) of the Public Finance Act 1989
Crown entity group means a group comprising—
- (a) a Crown entity; and
- (b) its Crown entity subsidiaries under paragraph (a) of the definition of Crown entity subsidiaries in column 2 of section 7(1)(c); and
- (c) any entity that is its subsidiary for the purpose of any financial reporting standard that applies to the Crown entity under generally accepted accounting practice
debt security has the meaning set out in section 2 of the Securities Act 1978
derivative transaction means—
- (a) a transaction that is a rate swap transaction, swap option, basis swap, forward rate transaction, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, forward purchase or sale of a security, or commodity or other financial instrument or interest (including an agreement or option that relates to any of these transactions); or
- (b) a transaction that is similar to any transaction referred to in paragraph (a) that—
  - (i) is currently, or in the future becomes, recurrently entered into in the financial markets; and
  - (ii) is a forward, swap, future, option, or other derivative on 1 or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, economic indices or measures of economic risk or value, environmental or climatic variable, or other benchmarks against which payments or deliveries are to be made
financial year means,—
- (a) in relation to a school board of trustees or a tertiary education institution, an academic year as defined in section 159(1) of the Education Act 1989; and
- (b) in relation to any other Crown entity, the 12 months ending on the close of 30 June or any other date determined for that entity by the Minister of Finance
forecast financial statements has the meaning set out in section 2(1) of the Public Finance Act 1989
generally accepted accounting practice means—
- (a) approved financial reporting standards (within the meaning of section 2(1) of the Financial Reporting Act 1993) so far as those standards apply to the Crown entity:
- (b) in relation to matters for which no provision is made in approved financial reporting standards (within the meaning of section 2(1) of the Financial Reporting Act 1993) and that are not subject to any applicable rule of law, accounting policies that—
  - (i) are appropriate in relation to the Crown entity; and
  - (ii) have authoritative support within the accounting profession in New Zealand
outputs—
- (a) means the goods or services that are supplied by a Crown entity; but
- (b) does not include goods and services that are produced for purchase or consumption solely within the Crown entity group
public security has the meaning set out in section 2(1) of the Public Finance Act 1989
registered bank has the meaning set out in section 2 of the Reserve Bank of New Zealand Act 1989
registered building society means a building society within the meaning of the Building Societies Act 1965 that is registered on the register of building societies kept under that Act
security has the meaning set out in section 2D of the Securities Act 1978 except that it does not include the things referred to in subsection (1)(d) to (f) of that section
working day has the meaning set out in section 2(1) of the Public Finance Act 1989.
(2) Any term or expression that is defined in the Public Finance Act 1989 and used, but not defined, in this Part has the same meaning as in the Public Finance Act 1989.

Subpart 2—Reporting obligations

137 Application of this subpart

(1) This subpart applies in respect of financial years commencing on or after 1 January 2006.
(2) Subsection (1) is subject to section 198.

Planning: Statement of intent

138 Purpose of statement of intent

The purpose of a statement of intent is to promote the public accountability of a Crown entity by—
- (a) enabling the Crown to participate in the process of setting the Crown entity's medium-term intentions and undertakings:
- (b) setting out for the House of Representatives those intentions and undertakings:
- (c) providing a base against which the Crown entity's actual performance can later be assessed.

139 Obligation to prepare statement of intent

(1) At or before the start of each financial year, a Crown entity must prepare a statement of intent for the Crown entity for that financial year and at least the 2 following financial years.
(2) However, in the case of a Crown entity group,—
- (a) the parent Crown entity must prepare a statement of intent for the Crown entity group as if—
  - (i) section 142(1)(a) required 2 forecast financial statements, 1 for the parent Crown entity and 1 for the Crown entity group; and
  - (ii) sections 138 to 142 otherwise required consolidated information in respect of the Crown entity group (rather than a single Crown entity); and
- (b) no other member of the Crown entity group needs to prepare a statement of intent.
(3) This section applies unless the Crown entity is exempted from its requirements by or under this or another Act.
Compare: 1989 No 44 s 41C

140 Statement of intent for newly established Crown entities

(1) As soon as practicable after a Crown entity is established, the Crown entity must comply with section 139 as if it were the start of the financial year.
(2) The process requirements of section 148(4), rather than section 146, apply to the process for preparing that statement of intent.
(3) The responsible Minister may give directions to the Crown entity on any matters referred to in section 141(1)(b) to (d), (g), and (h) at any time before the Crown entity's statement of intent is in force under section 144.
(4) The directions apply as if they were the Crown entity's statement of intent, until the Crown entity's statement of intent is in force.
(5) Sections 113, 114, and 115 apply to the directions.
(6) An entity that becomes a Crown entity within 4 months before the end of the Crown entity's financial year, and that has prepared, in accordance with subsection (1), a statement of intent for the next financial year and at least the 2 following financial years, need not prepare a new statement of intent at or before the start of the next financial year.

141 Content of statement of intent

(1) Each statement of intent must contain the following information for the full period to which it relates:
- (a) key background information about the Crown entity and its operating environment:
- (b) the nature and scope of the entity's functions and intended operations:
- (c) the specific impacts, outcomes, or objectives that the entity seeks to achieve or contribute to and, if the entity is directed to give effect to or have regard to government policy directions, how those objectives might relate to any outcomes or objectives referred to in the direction:
- (d) how the entity intends to perform its functions and conduct its operations to achieve those impacts, outcomes, or objectives:
- (e) how the entity proposes to manage the organisational health and the capability of the entity:
- (f) the main financial and non-financial measures and standards by which the future performance of the Crown entity may be judged:
- (g) the matters on which the Crown entity will consult or notify its responsible Minister before making a decision, the matters on which it will report to its responsible Minister, and the frequency of reporting:
- (h) any process to be followed for the purpose of section 100:
- (i) other matters the entity is required to include in its statement of intent under this Act or another Act:
- (j) any other matters that are reasonably necessary to achieve an understanding of the entity's intentions and direction.
(2) The statement of intent must also contain the information required by section 142 for the first financial year of the period to which it relates.
(3) A statement of intent must be in writing, be dated, and be signed on behalf of the board by 2 members of the entity or, in the case of a corporation sole, by the sole member.
(4) A Crown entity that is to be disestablished or significantly restructured may, with the agreement of the responsible Minister, provide a statement of intent that includes the information required under this section and section 142 for a period of less than 3 financial years.
Compare: 1989 No 44 s 41D

142 Extra information required in statement of intent for first financial year

(1) Each statement of intent must contain the following information for the first financial year of the period to which it relates:
- (a) forecast financial statements for the entity that have been prepared in accordance with generally accepted accounting practice; and
- (b) a statement of forecast service performance; and
- (c) any other measures and standards necessary to assess the Crown entity's performance at the end of the financial year; and
- (d) a statement of all significant assumptions underlying the forecast financial statements; and
- (e) any additional information and explanations needed to fairly reflect the forecast financial operations and financial position of the entity.
(2) The statement of forecast service performance must describe the classes of outputs the Crown entity proposes to supply (except to the extent that the entity is exempted under section 143) and—
- (a) provide measures and forecast standards of output delivery performance against which the entity's actual delivery of classes of outputs will be reported and audited in the statement of service performance at the end of the financial year; and
- (b) identify the expected revenue to be earned, and proposed expenses to be incurred, for each class of outputs; and
- (c) comply with generally accepted accounting practice; and
- (d) include a statement of any exemptions granted under section 143.

143 Exemption for certain outputs

(1) The Minister of Finance may exempt, from any statement of forecast service performance required under section 142(1)(b) or any statement of service performance required under section 153(1), any class of outputs that the Minister is satisfied are—
- (a) not directly funded (in whole or in part) by the Crown in accordance with an appropriation for the purpose, or by grants distributed under any Act, or by levies, fees, or charges prescribed by or under any Act; or
- (b) to be adequately reported on, in that financial year, to the House of Representatives by a Minister, department, or another public entity.
(2) The Minister of Finance may exempt a class of outputs under subsection (1) that includes outputs that do not comply with paragraph (a) or paragraph (b) of that subsection if the Minister is satisfied that those outputs have an insignificant value.
(3) A statement of forecast service performance does not need to contain information about exempted outputs.

144 Application and term of statement of intent

A statement of intent is in force—
- (a) from the later of—
  - (i) the date on which the final statement of intent is provided to the responsible Minister; or
  - (ii) the first day of the period to which the statement of intent relates; and
- (b) until a new statement of intent is in force in relation to that entity or group (despite the end of any financial year to which the statement relates); and
- (c) with any amendments that are made as described in section 147 or section 148.

145 Ministerial involvement in statements of intent

Ministers may participate in determining the content of statements of intent as follows:
- (a) a responsible Minister may agree with the Crown entity that information additional to that required by sections 141 and 142 be included in the statement of intent:
- (b) a responsible Minister may, by written notice to 1 or more Crown entities, specify the particular form in which any information in the statement of intent must be disclosed:
- (c) a responsible Minister may make comments on a draft statement of intent under section 146 or on an amendment to a statement of intent proposed by the Crown entity under section 148:
- (d) a responsible Minister may direct amendments to certain information in a statement of intent under section 147.

146 Process for providing statement of intent to responsible Minister

(1) A Crown entity that is required to prepare a statement of intent must provide it to its responsible Minister.
(2) The process that must be followed in providing a statement of intent is as follows:
- (a) the Crown entity must provide a draft statement of intent to its responsible Minister by whichever is the later of—
  - (i) 30 days before the start of each financial year; or
  - (ii) if the Crown entity's financial year ends on 30 June, the date that the first Appropriation Bill relating to a financial year is introduced into the House of Representatives in accordance with section 12 of the Public Finance Act 1989; and
- (b) the responsible Minister must provide to the entity any comments that he or she may have on the draft no later than—
  - (i) 14 days before the start of the financial year, if subsection (2)(a)(i) applies; or
  - (ii) 16 days after receiving the draft, if subsection (2)(a)(ii) applies; and
- (c) the entity must consider the comments (if any) on the draft and provide the final statement of intent to its responsible Minister—
  - (i) on or before the start of the financial year, if subsection (2)(a)(i) applies; or
  - (ii) 30 days after the draft was supplied to the responsible Minister, if subsection (2)(a)(ii) applies.

147 Amendments to statement of intent by responsible Minister

(1) A responsible Minister of a Crown entity may direct a Crown entity to amend any provision that is included in the entity's statement of intent under section 141(1)(b), (c), (d), (f), (g), or (h) or section 142(1)(b).
(2) If a responsible Minister intends to so direct, the process is as follows:
- (a) the Minister must give a direction to the Crown entity specifying the amendment that it is required to give effect to; and
- (b) sections 113, 114, and 115 apply.
(3) The amendment to the statement of intent, as specified by the Minister, is in force from the effective date of the direction (which may not be earlier than the date on which the direction is presented to the House of Representatives under section 115).
(4) The final amendment must be in writing, be dated, and be signed on behalf of the board by 2 members or, in the case of a corporation sole, by the sole member.
(5) Section 148 does not apply to amendments made under this section.
Compare: 1989 No 44 s 41G

148 Amendments to statement of intent by Crown entity

(1) A Crown entity may amend its statement of intent.
(2) A Crown entity must amend its statement of intent if—
- (a) the information contained in the statement of intent is false or misleading in a material particular; or
- (b) the intentions and undertakings in the statement of intent are significantly altered or affected by—
  - (i) a direction given to the Crown entity by a Minister or by a whole of government direction; or
  - (ii) any change in the law; or
  - (iii) any other change in the entity's operating environment.
(3) The Crown entity must make the amendment required under subsection (2) as soon as practicable after the entity becomes aware of the facts that give rise to the obligation to amend under this section.
(4) A Crown entity must amend its statement of intent in accordance with the following process:
- (a) the Crown entity must provide a draft amendment to its responsible Minister; and
- (b) the responsible Minister must provide to the entity any comments that he or she may have no later than 14 days after receiving the draft; and
- (c) the entity must consider the comments (if any) and must provide the final amendment to its responsible Minister as soon as practicable; and
- (d) the final amendment to the statement of intent is in force from the date on which the final amendment is provided to the responsible Minister.

149 Obligation to present and publish statement of intent

(1) A responsible Minister for a Crown entity must present a copy of the final statement of intent, and any amendment to it, to the House of Representatives no later than 5 working days after the final statement of intent or amendment (as the case may be) is received by the Minister or, if Parliament is not in session, as soon as possible after the commencement of the next session of Parliament.
(2) A responsible Minister who presents a final statement of intent that covers a limited period in accordance with section 141(4) must also present with it an explanation of why it was not possible to produce a statement of intent for the period of 3 financial years.
(3) A Crown entity must publish its statement of intent as soon as practicable after it has been presented to the House of Representatives, but in any case not later than 10 working days after the statement of intent is received by the Minister, in a manner consistent with any instructions given under section 174.
Compare: 1989 No 44 s 41F

Reporting: Annual report

150 Obligation to prepare, present, and publish annual report

(1) A Crown entity must—
- (a) at the end of each financial year, prepare a report on the affairs of the Crown entity; and
- (b) provide the report to its responsible Minister no later than 15 working days after receiving the audit report provided under section 156.
(2) However, in the case of a Crown entity group,—
- (a) the parent Crown entity must prepare an annual report on the affairs of the Crown entity group; and
- (b) no other member of the Crown entity group needs to prepare an annual report.
(3) A responsible Minister of a Crown entity must present the entity's annual report to the House of Representatives within 5 working days after receiving the annual report or, if Parliament is not in session, as soon as possible after the commencement of the next session of Parliament.
(4) A Crown entity must publish its annual report as soon as practicable after it has been presented to the House of Representatives, but in any case not later than 10 working days after the annual report is received by the Minister, in a manner consistent with any instructions given under section 174.
Compare: 1989 No 44 s 41I

151 Form and content of annual report

(1) An annual report must contain the following information and reports in respect of the financial year to which it relates:
- (a) information on operations that complies with subsection (2); and
- (b) a statement of service performance in accordance with section 153; and
- (c) the annual financial statements for the entity and, if the entity is the parent of a Crown entity group, the consolidated financial statements for the group in accordance with section 154; and
- (d) a statement of responsibility in accordance with section 155; and
- (e) the audit report in accordance with section 156; and
- (f) any direction given to the entity by a Minister in writing under any enactment during that financial year; and
- (g) information on compliance with its obligation to be a good employer (including its equal employment opportunities programme); and
- (h) information required by section 152 (which relates to payments in respect of members, committee members, and employees during that financial year); and
- (i) information required by section 20(3) (which relates to the enforcement of certain natural person transactions); and
- (j) information required by section 68(6) (which relates to permission to act despite being interested in a matter); and
- (k) any matters that relate to or affect the entity's operations that the entity is otherwise required, or has undertaken, or wishes to report on in its annual report.
(2) The annual report must provide the information that is necessary to enable an informed assessment to be made of the entity's operations and performance for that financial year, including an assessment against the intentions, measures, and standards set out in the statement of intent prepared at the beginning of the financial year.
(3) An annual report must be in writing, be dated, and be signed on behalf of the board by 2 members or, in the case of a corporation sole, by the sole member.

152 Disclosure of payments in respect of members, committee members, and employees

(1) The annual report must include, in respect of the Crown entity or, in the case of a Crown entity group, for each Crown entity in the group,—
- (a) for each member, the total value of the remuneration (other than compensation or other benefits referred to in paragraph (d)) paid or payable to the member in his or her capacity as a member from the entity (or entities in the group, as the case may be) during that financial year; and
- (b) for each committee member who is not a board member or an employee, the total value of the remuneration (other than compensation or other benefits referred to in paragraph (d)) paid or payable to the member in his or her capacity as a committee member from the entity (or entities in the group, as the case may be) during that financial year; and
- (c) the number of employees to whom, during the financial year, remuneration (other than compensation or other benefits referred to in paragraph (d)) was paid or payable in their capacity as employees, the total value of which is or exceeds $100,000 per annum, and the number of those employees in brackets of $10,000; and
- (d) the total value of any compensation or other benefits paid or payable to persons who ceased to be members, committee members, or employees during the financial year in relation to that cessation and the number of persons to whom all or part of that total was paid or payable; and
- (e) details of any indemnity provided by the entity during the financial year to any member, office holder, or employee; and
- (f) details of any insurance cover effected by the entity during the financial year in respect of the liability or costs of any member, office holder, or employee.
(2) In subsection (1), member and office holder and employee include a person who was a member or office holder or employee at any time after the commencement of this Act but who is no longer a member, office holder, or employee.
Compare: 1989 No 44 s 41I; 1993 No 105 s 211

153 Form and content of statement of service performance

(1) A statement of service performance must—
- (a) be prepared in accordance with generally accepted accounting practice; and
- (b) describe each class of outputs supplied by the entity during the financial year; and
- (c) include, for each class of outputs,—
  - (i) the standards of delivery performance achieved by the entity, as compared with the forecast standards included in the entity's statement of forecast service performance at the start of the financial year; and
  - (ii) the actual revenue earned and output expenses incurred, as compared with the expected revenues and proposed output expenses included in the entity's statement of forecast service performance at the start of the financial year.
(2) A Crown entity need not prepare a statement of service performance in respect of outputs for which it has an exemption under section 143.

154 Annual financial statements

(1) At the end of each financial year, a Crown entity must prepare financial statements in relation to the entity for that financial year.
(2) In addition, a Crown entity that is a parent of a Crown entity group must prepare consolidated financial statements in relation to the group for that financial year.
(3) The financial statements must—
- (a) comply with generally accepted accounting practice; and
- (b) include any other information or explanations needed to fairly reflect the financial operations and financial position; and
- (c) include the forecast financial statements prepared at the start of the financial year, for comparison with the actual financial statements.

155 Statement of responsibility

The statement of responsibility must—
- (a) contain a statement of the signatories' responsibility for the preparation of the financial statements and statement of service performance and for the judgments in them; and
- (b) contain a statement of the signatories' responsibility for establishing and maintaining a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting; and
- (c) contain a statement that, in the opinion of the signatories, the financial statements and statement of service performance for the financial year fairly reflect the financial position and operations of the Crown entity; and
- (d) be dated and signed on behalf of the board by 2 members or, in the case of a corporation sole, by the sole member.

156 Audit report

(1) A Crown entity must forward to the Auditor-General—
- (a) its annual financial statements, statement of service performance, and any other information that the Auditor-General has agreed, or is required, to audit within 3 months after the end of each financial year; and
- (b) its annual report in a timely manner to enable the Auditor-General to review that report before providing the audit report required under subsection (2)(b).
(2) The Auditor-General must—
- (a) audit the statements referred to in subsection (1)(a); and
- (b) provide an audit report on them to the Crown entity within 4 months after the end of each financial year.

157 Reporting by multi-parent subsidiaries

(1) A multi-parent subsidiary must comply with the requirements of this subpart.
(2) However, the Minister of Finance may exempt a multi-parent subsidiary from the requirement to prepare a statement of intent or an annual report if the Minister is satisfied that it would be unduly onerous on the multi-parent subsidiary to comply with the requirement.
(3) The exemption may be granted subject to any conditions the Minister thinks fit (which may include the condition that the statement of intent or annual report of 1 of the parents must cover the multi-parent subsidiary).

Subpart 3—Other provisions for financial accountability

Bank accounts

158 Bank accounts of Crown entities

(1) A Crown entity must ensure that all money received by the Crown entity is paid, as soon as practicable after it is received, into 1 or more bank accounts that are established, maintained, and operated by the Crown entity at 1 or more of the following:
- (a) a registered bank or registered building society that satisfies a relevant credit-rating test specified in either regulations made under this Part or a notice in the Gazette published by the Minister of Finance; or
- (b) a registered bank or registered building society that meets the conditions of any relevant approval given by the Minister of Finance by notice in the Gazette; or
- (c) a bank outside New Zealand that meets the conditions of any relevant approval given by the Minister of Finance by notice in the Gazette; or
- (d) a bank outside New Zealand if the conditions specified in subsection (2) are met.
(2) The conditions referred to in subsection (1)(d) are—
- (a) the Crown entity, or the class of Crown entities to which the Crown entity belongs, must be authorised to establish, maintain, and operate 1 or more bank accounts at 1 or more banks outside New Zealand by—
  - (i) the Minister of Finance in writing; or
  - (ii) any regulations made under this Part; and
- (b) the bank account or bank accounts must be of a type approved by—
  - (i) the Minister of Finance in writing; or
  - (ii) any regulations made under this Part.
(3) A Crown entity must establish, maintain, and operate a bank account referred to in subsection (2) subject to—
- (a) any regulations made under this Part; and
- (b) if applicable, any conditions of the authorisation or approval given by the Minister of Finance; and
- (c) the entity's Act.
(4) The Minister of Finance must notify in the Gazette an authorisation or approval given under subsection (2)(a)(i) or, as the case may be, subsection (2)(b)(i).
(5) A Crown entity must ensure that it does not establish, maintain, or operate a bank account other than as provided for in subsection (1).
(6) All money in a bank account at a registered bank or a registered building society must be denominated in New Zealand dollars unless the Minister of Finance allows otherwise.
(7) A Crown entity must properly authorise the withdrawal or payment of money from a bank account of the Crown entity.
(8) There is a period of grace if a bank account ceases to qualify under subsection (1), and—
- (a) during that period the Crown entity may continue to pay money into the bank account; but
- (b) by the end of the period the Crown entity must have closed the account and paid all the money in the account into another bank account that does qualify under subsection (1).
(9) The period of grace ends on the earlier of—
- (a) 2 months after the bank account ceases to qualify under subsection (1); or
- (b) a date specified by the Minister of Finance and notified to the Crown entity.
Compare: 1989 No 44 s 24

Acquisition of securities, borrowing, guarantees, indemnities, and derivative transactions

159 Application of acquisition of securities, borrowing, guarantees, indemnities, and derivative transactions rules

Sections 160 to 164 apply on and after 1 April 2005.

160 Further provision relating to acquisition of securities, borrowing, guarantees, indemnities, and derivative transactions rules

(1) Sections 161 to 164 apply subject to—
- (a) any regulations made under this Part; and
- (b) any approval given jointly by the entity's responsible Minister and the Minister of Finance; and
- (c) an entity's Act; and
- (d) an exemption granted in Schedule 1 or Schedule 2.
(2) Sections 161 to 164 apply to a Crown entity subsidiary in the same way as they apply to its parent.
(3) The Minister of Finance must notify in the Gazette an approval given under subsection (1)(b).

161 Restrictions on acquisition of securities

(1) A Crown entity must not acquire securities other than—
- (a) a debt security denominated in New Zealand dollars that is issued by a registered bank, or by any other entity, that satisfies a credit-rating test that is specified in either regulations made under this Part or a notice in the Gazette published by the Minister of Finance:
- (b) a public security:
- (c) as provided in section 160.
(2) This section does not apply to any money, security, or credit balance in a bank account held by a Crown entity on trust for any purpose or for another person.
(3) This section does not prohibit a Crown entity from acquiring subsidiaries or shares if section 96 or, as the case may be, section 100 allows the acquisition.

162 Restrictions on borrowing

A Crown entity must not borrow from any person, or amend the terms of any borrowing, other than as provided in section 160.

163 Restrictions on giving of guarantees and indemnities

(1) A Crown entity must not, with or without security, give a guarantee to, or indemnify, another person other than as provided in section 160.
(2) This section does not apply if the other person is—
- (a) a member, office holder, committee member, employee, or other individual indemnified by the board in relation to any claim or proceeding under—
  - (i) section 122 of this Act; or
  - (ii) section 162 of the Companies Act 1993; or
  - (iii) the entity's natural person powers or other powers in the entity's Act:
- (b) a delegate or agent indemnified by the board under its natural person powers, or the common law, in relation to any claim or proceeding.
(3) This section does not apply to any guarantee or indemnity that is implied at law or arising from any transactions that may be authorised under regulations made under this Part.

164 Restrictions on use of derivatives

A Crown entity must not enter into a derivative transaction, or amend the terms of that transaction, other than as provided in section 160.

Miscellaneous

165 Net surplus payable by certain statutory entities and Crown entity companies

(1) Unless an exemption is granted in Schedule 1 or Schedule 2, the Minister of Finance may, in writing, require a statutory entity or Crown entity company to pay to the Crown a sum equal to the whole or any part of a net surplus of the statutory entity or Crown entity company, or its Crown entity group, as determined in accordance with generally accepted accounting practice or any other basis that may be agreed between that Minister and the entity.
(2) In this section, net surplus includes both an annual profit and an accumulated surplus.
(3) Before the Minister of Finance issues a requirement under this section,—
- (a) the Minister of Finance must consult with each responsible Minister; and
- (b) a responsible Minister must consult with the Crown entity.
(4) This section does not limit any provision for the payment of an annual distribution or similar payment to the Crown under the entity's Act.
(5) This section does not limit the need for a Crown entity company to comply also with the provisions of the Companies Act 1993 (or its constitution, if relevant) relating to distributions.

166 Capital charge payable by certain statutory entities

(1) This section applies to a statutory entity only if the Minister of Finance has notified the statutory entity in writing that it is now subject to a capital charge under this section.
(2) A statutory entity must pay to the Crown a capital charge in respect of the whole or part of the net assets of the entity of an amount, and at the times, prescribed by the capital charge rules.
(3) Unless otherwise compensated by the Crown, the Minister of Finance may not require a statutory entity to pay a capital charge in respect of the net value of assets acquired by way of gift from any person other than the Crown or an entity described in section 27(3) of the Public Finance Act 1989.
(4) In this section, net assets means, in relation to a Crown entity, the total assets of the entity, less its total liabilities, as defined in accordance with generally accepted accounting practice.
(5) The Minister of Finance must—
- (a) consult with the statutory entity before notifying the statutory entity that it is subject to a capital charge under this section; and
- (b) present a copy of the notification to the House of Representatives as soon as practicable after the date on which the notification is given.

167 Gifts

(1) Any money or property that is gifted to a Crown entity may be accepted or disclaimed by a Crown entity.
(2) The limitations in this Act (such as the limitations on the form in which property may be held) do not apply to gifted property during a period that is reasonable in the circumstances.

168 Accounting records to be kept

(1) The board of a Crown entity must cause accounting records to be kept that—
- (a) correctly record and explain the transactions of the Crown entity; and
- (b) will at any time enable the financial position of the Crown entity to be determined with reasonable accuracy; and
- (c) will enable the members of the Crown entity to ensure that the financial statements of the Crown entity comply with section 154; and
- (d) will enable the financial statements of the Crown entity to be readily and properly audited.
(2) The accounting records must be in written form or in a manner in which they are easily accessible and convertible into written form.
(3) If the board of a Crown entity fails to comply with the requirements of this section, every member of the Crown entity commits an offence and is liable on conviction to a penalty not exceeding $5,000.
(4) It is a defence to a member charged with an offence under this section if the member proves that—
- (a) the board took all reasonable and proper steps to ensure that the requirements of this section would be complied with; or
- (b) he or she took all reasonable and proper steps to ensure that the board complied with the requirements of this section; or
- (c) in the circumstances he or she could not reasonably have been expected to take steps to ensure that the board complied with the requirements of this section.
Compare: 1993 No 105 s 194

Subpart 4—Miscellaneous

169 Taxation of statutory entities

A statutory entity is a public authority for the purpose of the Inland Revenue Acts (as that term is defined in the Tax Administration Act 1994) unless either those Acts or the entity's Act provides otherwise.

170 Power to require output agreement

(1) A Minister may require a Crown entity to have in place an output agreement for any or all outputs that the Crown entity intends to provide that do not qualify for an exemption under section 143(1)(a).
(2) The purpose of an output agreement is to assist a Minister and a Crown entity to clarify, align, and manage their respective expectations and responsibilities in relation to the funding and production of certain outputs, including the particular standards, terms, and conditions under which the Crown entity will deliver and be paid for the specified outputs.
(3) An output agreement may be for 1 year or any other term agreed between the parties, may be entered into at any time, and may be updated to reflect any changes agreed between the parties during its term.
(4) An output agreement need not be legally enforceable as an agreement, but gives rise to legally enforceable board member duties under sections 49 and 92.
(5) An output agreement must be in writing, be dated, and be signed by, or on behalf of, the Minister and the Crown entity.

171 Offences

(1) Every person commits an offence against this Act who knowingly—
- (a) refuses or fails to produce any information that is in that person's possession or under that person's control in relation to the management, performance, or operations of a Crown entity when required to do so under this Act; or
- (b) resists or obstructs any person acting in the discharge of that person's functions or in the exercise of that person's powers under this Act; or
- (c) represents directly or indirectly that he or she holds any authority under this Act knowing that he or she does not hold that authority.
(2) Every person commits an offence against this Act who makes any statement or declaration, or gives any information or certificate, required by or under this Act, knowing it to be false or misleading.
Compare: 1989 No 44 s 76

172 Penalties for offences

(1) Every person who commits an offence against section 171(1) is liable on summary conviction,—
- (a) in the case of an individual, to a fine not exceeding $2,000; or
- (b) in the case of a person or organisation other than an individual, to a fine not exceeding $5,000.
(2) Every person who commits an offence against section 171(2) is liable on summary conviction,—
- (a) in the case of an individual, to imprisonment for a term not exceeding 12 months, or to a fine not exceeding $5,000; or
- (b) in the case of a person or organisation other than an individual, to a fine not exceeding $15,000.
Compare: 1989 No 44 s 77

173 Regulations under this Part

(1) The Governor-General may, by Order in Council, make regulations for all or any of the following purposes:
- (a) requiring Crown entities to include information in a statement of intent or annual report that is additional to the information required by this Act:
- (b) providing for the establishment, maintenance, and operation of bank accounts by Crown entities:
- (c) prescribing the nature and extent of the acquisition of securities that may be undertaken by Crown entities, the securities that Crown entities may acquire, and any other matters relating to the acquisition:
- (d) prescribing the nature and extent of borrowing that may be undertaken by Crown entities, the persons from whom a Crown entity may borrow, and any other matters relating to borrowing by Crown entities:
- (e) authorising the giving of any guarantees or indemnities:
- (f) prescribing the nature and extent of derivative transactions that may be entered into by Crown entities, the persons with whom a Crown entity may enter into those transactions, and any other matters relating to those transactions in respect of Crown entities:
- (g) specifying credit-rating tests for the purpose of this Part:
- (h) prescribing capital charge rules for the purposes of section 166, including (without limitation) the amount of a capital charge or the method of calculating the amount of a capital charge, the procedures for notifying a statutory entity of the capital charge payable, the frequency of its payment, how the assets of a statutory entity must be valued in calculating the capital charge, and the cost-of-capital rate or formula for determining the cost-of-capital rate for a statutory entity:
- (i) amending Schedule 1 or Schedule 2 to remove or add any exemptions from the acquisition of securities, borrowing, guarantees, or derivatives rules in sections 161 to 164:
- (j) amending Schedule 1 or Schedule 2 to add any exemption from the requirement to pay a net surplus to the Crown in section 165:
- (k) prescribing offences in respect of the contravention of any regulations made under this Act, and prescribing penalties not exceeding $2,000 in respect of those offences:
- (l) providing for any other matters contemplated by this Act or necessary for its administration or necessary for giving it full effect.
(2) The regulations in subsection (1) may be made in respect of all or any Crown entities or categories or types of Crown entities.

174 Minister of Finance instructions

(1) The Minister of Finance may issue instructions to Crown entities that,—
- (a) prescribe minimum requirements concerning the publication of information that Crown entities must publish by or under this Act:
- (b) prescribe the non-financial reporting standards that Crown entities must apply and the form in which Crown entities must provide the information that they are required to present to the House of Representatives by or under this Act.
(2) The instructions in subsection (1) may be made in respect of all or any Crown entities, or categories or types of Crown entities.
(3) The instructions in subsection (1) must be consistent, in the opinion of the Minister, with generally accepted accounting practice and any reporting standard imposed by or under any other Act, to the extent that those matters are relevant to the instructions.
(4) The Minister of Finance may exempt any Crown entities, or categories or types of Crown entities, from provisions of any instruction, and may amend or revoke that exemption in the same way.
(5) The instructions are regulations for the purpose of the Regulations (Disallowance) Act 1989 but not the Acts and Regulations Publication Act 1989.
(6) The Minister must notify the instruction in the Gazette, and publish it on the Internet, as soon as practicable after issuing it.

175 Consultation with House of Representatives on reporting standards

(1) The Minister must prepare and submit to the Speaker of the House of Representatives a draft of any instruction proposed to be issued under section 174(1)(b).
(2) The Speaker must present the draft instruction to the House of Representatives as soon as is reasonably practicable.
(3) The Minister, after considering any comments of the Speaker or any committee of the House of Representatives that considered the draft instruction, may amend the draft instruction as the Minister thinks fit.
(4) The Minister must, as soon as practicable after issuing an instruction, present it to the House of Representatives.
Compare: 2001 No 10 s 36

176 Application of provisions of Public Finance Act 1989

The following provisions of the Public Finance Act 1989 apply (without limitation) in relation to Crown entities:
- (a) section 26 (terms and conditions of capital injections):
- (b) section 49 (liability for debts of Crown entities):
- (c) section 74 (unclaimed money).

Part 5
Miscellaneous provisions

Miscellaneous

177 Application of liquidation provisions of Judicature Act 1908 to statutory entities

For the avoidance of doubt, sections 17A to 17E of the Judicature Act 1908 apply to a statutory entity, unless the statutory entity may be put into liquidation in accordance with the entity's Act.

178 Application of Archives Act 1957

The Archives Act 1957 applies to a Crown entity that is a government office for the purpose of that Act.

179 Public Bodies Contracts Act 1959 does not apply to Crown entities

(1) The Public Bodies Contracts Act 1959 does not apply to a Crown entity.
(2) The schedules of the Public Bodies Contracts Act 1959 are consequentially amended by repealing every item that relates to a Crown entity.

180 Local Authorities (Members' Interests) Act 1968 does not apply to Crown entities

(1) The Local Authorities (Members' Interests) Act 1968 does not apply to a Crown entity.
(2) The schedules of the Local Authorities (Members' Interests) Act 1968 are consequentially amended by repealing every item that relates to a Crown entity.

181 Administration of Crown entity provisions

(1) Parts 1, 2, 3, and 5 are administered in the State Services Commission.
(2) Part 4 is administered in the Treasury.

Transitional and savings provisions

182 Existing members exempt from qualification requirements

Every member of a statutory entity or Crown entity company or a Crown entity subsidiary in office at the commencement of this section may continue in office for the remainder of his or her current term of office as if sections 30 and 89 had not been enacted.

183 Term of office of existing members other than ex officio members

Every member of a statutory entity (other than an ex officio member) in office at the commencement of this section may continue in office for the remainder of his or her current term of office as if section 32(1) had not been enacted.

184 Term of office of existing ex officio members

(1) Every ex officio member of a statutory entity (other than the Secretary for Justice who is an ex officio member of the Electoral Commission) who is in office at the date of commencement of this section ceases to be a member on that date.
(2) An ex officio member is not entitled to any compensation or other payment or benefit relating to his or her ceasing to be an ex officio member under this section.
(3) In this section and sections 183, 185, and 186, an ex officio member is a member who holds office as a member because he or she is a representative of any part of the Public Service.

185 Term of office of existing chairpersons and deputy chairpersons

Every chairperson and deputy chairperson of a statutory entity (other than an ex officio member) in office at the commencement of this section is not affected by any change in the method of appointment of the person under this Act.

186 Continuation of existing board committees

(1) Every committee that exists at the commencement of this section continues in existence under this Act until it is disestablished under this Act.
(2) Every member of the committee (other than an ex officio member) who is in office at that date continues in office under this Act until the person is removed under this Act or his or her term of office expires.

187 Continuation of existing employment

A person who is, at the commencement of this section, an employee of a statutory entity, does not cease to be an employee because of the coming into force of this Act.

188 Existing compensation provision

(1) This section applies to a member of a Crown entity and every member of a committee who is entitled, at the commencement of this section under any contract or arrangement, to any compensation or other payment or benefit relating to his or her ceasing for any reason to hold office as a member.
(2) The entitlement is not affected by the enactment of this Act.
(3) However, the entitlement is cancelled on the date of reappointment of the member to the Crown entity or the committee (if any).

189 Existing protection from liability provisions

(1) This section applies to a member, an office holder, or an employee of a Crown entity who is entitled, immediately before the date of commencement of this section, to be indemnified by a Crown entity in respect of any proceedings for any liability or costs arising from any act or omission as a member, office holder, or employee that occurred before that date.
(2) This Act does not affect the member, office holder, or employee's entitlement to an indemnity if that entitlement is, in its overall effect, as favourable to that person as, or more favourable to that person than, the entitlement provided for in this Act.

190 Existing insurance cover

(1) This section applies to a member, office holder, or employee of a statutory entity who has insurance cover at the commencement of this section in respect of any liability or costs arising from any act or omission as a member, office holder, or employee.
(2) The insurance cover is not affected by the enactment of this Act.
(3) However, if the insurance cover expires, or the member, office holder, or employee is reappointed or re-employed, the insurance can be renewed or effected only if permitted by this Act or the entity's Act.

191 Existing rights under Government Superannuation Fund Act 1956 unaffected

This Act does not affect any entitlement of a member, employee, or office holder of a Crown entity under the Government Superannuation Fund Act 1956.

192 Existing delegations and directions to continue

(1) A delegation that is in effect in respect of a statutory entity under a provision of another Act that is repealed by this Act at the commencement of this section continues in effect as if it were a delegation under section 73.
(2) A direction that is in effect in respect of a statutory entity under a provision of another Act at the commencement of this section continues in effect as if this Act had not been enacted.

193 Other existing things protected

The commencement of this Act does not affect the completion of a matter or thing, or the bringing or completion of proceedings, that relate to an existing right, interest, title, immunity, or duty.

194 Existing shareholdings in Crown entity subsidiaries

Subpart 3 of Part 2 does not apply to any company that is a Crown entity subsidiary at the date of commencement of this section until the later of—
- (a) 3 years after that subpart comes into force; or
- (b) a date specified by the Minister of Finance by notice in the Gazette (if the notice is given within that 3 years).

195 Existing bank accounts

There is a period of grace of 6 months after section 158 comes into force during which—
- (a) a Crown entity must continue to comply with section 24 of the Public Finance Act 1989, and (or, as the case may be, or) its entity's Act (if relevant), as if this Act and the Public Finance Amendment Act 2004 had not been passed; and
- (b) neither section 158, nor any amendment of an entity's Act in relation to bank accounts in Schedule 6 of this Act, apply to a Crown entity.

196 Existing law on securities, borrowing, guarantees, indemnities, and derivative transactions continues to apply until 1 April 2005

(1) This section applies to the period between the date on which this section comes into force and the start of 1 April 2005 (which is the date on which the new rules in sections 160 to 164 relating to securities, borrowing, guarantees, indemnities, and derivative transactions apply) (the transitional period).
(2) The rules relating to securities, borrowing, guarantees, indemnities, and derivative transactions that would have applied if this Act and the Public Finance Amendment Act 2004 had not been enacted continue to apply during the transitional period.
(3) Therefore, for example, the Crown entity must comply, during the transitional period, with the rules relating to those things that were in the Public Finance Act 1989 or the entity's Act, as the case may be, immediately before the commencement of this section.

197 Continuation of pre-1 April 2005 securities, borrowing, guarantees, indemnities, and derivative transactions

(1) This section applies to any security, borrowing, guarantee, indemnity, or derivative transaction that a Crown entity has lawfully acquired, given, or entered into before 1 April 2005 that the Crown entity would be restricted from having, acquiring, giving, or entering into under this Act after sections 160 to 164 apply.
(2) The security, borrowing, guarantee, indemnity, or derivative transaction is not affected by the enactment of this Act.
(3) However, the terms of the security, borrowing, guarantee, indemnity, or derivative transaction may be amended, or any options resulting from the security, borrowing, or derivative may be taken up, on and after 1 April 2005, only if permitted by the Minister of Finance.
(4) This section does not apply to an indemnity in respect of a member, office holder, employee, committee member, or other individual of a Crown entity in relation to a claim or proceeding.

198 Reporting obligations in respect of financial years ending before 1 July 2006

(1) The reporting requirements and provisions that would have applied if this Act and the Public Finance Amendment Act 2004 had not been enacted continue to apply in respect of each financial year that ends before 1 July 2006 to a Crown entity, rather than the reporting requirements and provisions enacted by this Act.
(2) Therefore, for example, the Crown entity must comply, in respect of those financial years, with the requirements relating to annual financial statements, annual reports, and audits that were in the Public Finance Act 1989 or the entity's Act, as the case may be, immediately before the commencement of this section.
(3) Despite subsections (1) and (2),—
- (a) section 87(2)(ca)(iv) and (v) of the Education Act 1989 applies in respect of each financial year that ends on or after 31 December 2004; and
- (b) section 152 applies in respect of the financial year commencing on 1 July 2005 and each subsequent financial year.
(4) In this section, Crown entity includes any entity that is required by any other Act to report as though it were a Crown entity.

199 Regulations for transitional, savings, and general purposes

(1) The Governor-General may, by Order in Council, make regulations for all or any of the following purposes:
- (a) providing for any transitional or savings matters concerning the coming into force of this Act:
- (b) providing for any other matters contemplated by this Act or necessary for its administration or necessary for giving it full effect.
(2) The regulations may be made in respect of all or any Crown entities or categories or types of Crown entities.
(3) Any transitional or savings provisions prescribed in regulations made under subsection (1) may be in addition to or in place of any of the provisions of sections 137, 159, 195, 196, 197, and 198.

Amendments to other enactments

200 Amendments to other enactments

The enactments specified in Schedule 6 are amended in the manner shown in that schedule.

201 Amendment to Gas Amendment Act 2004

(1) Amendment(s) incorporated in the Act(s).
(2) For the avoidance of doubt, the Gas Amendment Act 2004, assented to by Her Excellency the Governor-General on 17 October 2004, is deemed to be, and always to have been, a valid Act of Parliament.

ss 7, 160, 165

Note: A tick alongside the name of a statutory entity means that the statutory entity is granted an exemption from the section of this Act that appears above the tick.

Part 1
Crown agents

Name	Exemption from acquisition of securities, borrowing, guarantee, and derivative rules
	s 161	s 162	s 163	s 164
Accident Compensation Corporation
Career Services
Civil Aviation Authority of New Zealand
Crown Health Financing Agency
District Health Boards
Earthquake Commission
Electricity Commission
Energy Efficiency and Conservation Authority
Foundation for Research, Science, and Technology
Health Research Council of New Zealand
Health Sponsorship Council
Housing New Zealand Corporation
Legal Services Agency
Maritime Safety Authority of New Zealand
New Zealand Antarctic Institute
New Zealand Blood Service
New Zealand Fire Service Commission
New Zealand Qualifications Authority
New Zealand Tourism Board
New Zealand Trade and Enterprise
New Zealand Transport Agency
New Zealand Walking Access Commission
Pharmaceutical Management Agency
Social Workers Registration Board
Sport and Recreation New Zealand
Tertiary Education Commission

Schedule 1 Part 1 Crown Health Financing Agency: inserted, on 17 May 2005, by section 5(2) of the New Zealand Public Health and Disability Amendment Act 2005 (2005 No 63).
Schedule 1 Part 1 Land Transport New Zealand: repealed, on 1 August 2008, by section 50(1) of the Land Transport Management Amendment Act 2008 (2008 No 47).
Schedule 1 Part 1 New Zealand Transport Agency: inserted, on 1 August 2008, by section 50(1) of the Land Transport Management Amendment Act 2008 (2008 No 47).
Schedule 1 Part 1 New Zealand Walking Access Commission: inserted, on 30 September 2008, by section 82 of the Walking Access Act 2008 (2008 No 101).
Schedule 1 Part 1 Residual Health Management Unit: repealed, on 17 May 2005, by section 5(2) of the New Zealand Public Health and Disability Amendment Act 2005 (2005 No 63).
Schedule 1 Part 1 Transit New Zealand: repealed, on 1 August 2008, by section 50(1) of the Land Transport Management Amendment Act 2008 (2008 No 47).

Part 2
Autonomous Crown entities

Name	Exemption from acquisition of securities, borrowing, guarantee, and derivative rules
	s 161	s 162	s 163	s 164
Alcohol Advisory Council of New Zealand
Arts Council of New Zealand Toi Aotearoa
Broadcasting Commission
Charities Commission
Environmental Risk Management Authority
Families Commission
Government Superannuation Fund Authority
Guardians of New Zealand Superannuation
Mental Health Commission
Museum of New Zealand Te Papa Tongarewa Board
New Zealand Artificial Limb Board
New Zealand Film Commission
New Zealand Historic Places Trust (Pouhere Taonga)
New Zealand Lotteries Commission
New Zealand Symphony Orchestra
New Zealand Teachers Council
Public Trust
Retirement Commissioner
Standards Council
Te Reo Whakapuaki Irirangi (Māori Broadcasting Funding Agency)
Te Taura Whiri I Te Reo Māori (Māori Language Commission)
Testing Laboratory Registration Council

Schedule 1 Part 2 Charities Commission: inserted, on 1 July 2005, by section 76 of the Charities Act 2005 (2005 No 39).

Part 3
Independent Crown entities

Name	Exemption from acquisition of securities, borrowing, guarantee, and derivative rules
	s 161	s 162	s 163	s 164
Accounting Standards Review Board
Broadcasting Standards Authority
Children's Commissioner
Commerce Commission
Drug Free Sport New Zealand
Electoral Commission
Health and Disability Commissioner
Human Rights Commission
Independent Police Conduct Authority
Law Commission
Office of Film and Literature Classification
Privacy Commissioner
Securities Commission
Takeovers Panel
Transport Accident Investigation Commission

Schedule 1 Part 3 Drug Free Sport New Zealand: inserted, on 1 July 2007, by section 61 of the Sports Anti-Doping Act 2006 (2006 No 58).
Schedule 1 Part 3 Independent Police Conduct Authority: inserted, on 29 November 2007, by section 26 of the Independent Police Conduct Authority Amendment Act 2007 (2007 No 38).
Schedule 1 Part 3 New Zealand Sports Drug Agency: repealed, on 1 July 2007, by section 61 of the Sports Anti-Doping Act 2006 (2006 No 58).
Schedule 1 Part 3 Police Complaints Authority: repealed, on 29 November 2007, by section 26 of the Independent Police Conduct Authority Amendment Act 2007 (2007 No 38).

ss 7, 160, 165

Note: A tick alongside the name of a Crown entity company means that the Crown entity company is granted an exemption from the section of this Act that appears above the tick.

Name	Exemption from acquisition of securities, borrowing, guarantee, and derivative rules
	s 161	s 162	s 163	s 164
Crown Research Institutes
New Zealand Fast Forward Fund Limited
New Zealand Venture Investment Fund Limited
Radio New Zealand Limited
Television New Zealand Limited

Schedule 2 New Zealand Fast Forward Fund Limited: inserted, on 15 August 2008, by clause 3 of the Crown Entities (New Zealand Fast Forward Fund Limited) Order 2008 (SR 2008/248).

s 5

Section		Brief description
Sections 3 to 8		Crown entities and categories
Section 10		Interpretation
Section 99		Application to multi-parent subsidiaries
Section 102		Interface with Companies Act 1993 and other Acts
Section 107		Whole of government directions
Section 113		Safeguarding independence of Crown entities
Section 114		Crown entity must comply with directions given under statutory power of direction
Section 115		Procedure for all Ministerial directions
Section 119		Cross reference to State Sector Act 1988, ss 84–84B
Section 131(2)		Application of Ombudsmen Act 1975 and Official Information Act 1982
Section 133		Minister's power to request information
Section 134		Reasons for refusing to supply information
Section 135		Officials for the purposes of sections of the Crimes Act 1961
Section 136		Interpretation for Part 4
Section 137		Application of subpart 2 of Part 4
Section 155, with the variation specified in section 87(4) of the Education Act 1989		Statement of responsibility for financial statements
Section 157		Variation of reporting requirements of multi-parent subsidiaries
Section 158		Bank accounts
Section 159		Application of acquisition of securities, borrowing, guarantees, indemnities, and derivative transactions rules
Sections 160 to 164		Restrictions on acquisition of securities, borrowing, guarantees, indemnities, and derivative transactions
Section 167		Gifts
Section 168(1) and (2), except that the reference to section 154 must be read as a reference to section 87(3) of the Education Act 1989		Accounting records
Section 173		Regulations
Section 176		Application of provisions of the Public Finance Act 1989
Section 178		Application of Archives Act 1957
Section 179		Public Bodies Contracts Act 1959 does not apply
Section 180		Local Authorities (Members' Interests) Act 1968 does not apply
Sections 181, 188, 191, 193, 194, 195, 196, 197, 198, 199, 200		Transitional and savings provisions and associated consequential amendments

s 6

Section		Brief description
Section 3 to 8		Crown entities and categories
Section 10		Interpretation
Section 119		Cross reference to State Sector Act 1988, ss 84–84B
Section 131(2)		Application of Official Information Act 1982 and Ombudsmen Act 1975
Section 135 (but only in respect of office holders and employees of tertiary education institutions and Crown entity subsidiaries)		Officials for the purposes of sections of the Crimes Act 1961
Section 136		Interpretation for Part 4
Section 137		Application of subpart 2 of Part 4
Section 154, as amended by the Education Act 1989 section 220(2)–(2B), in Schedule 6		Financial statements
Section 155		Statement of responsibility for financial statements
Section 156		Audit report
Section 157		Allows for variation of reporting requirements of multi-parent subsidiaries
Section 220 Education Act 1989		Inclusion of financial statements in annual report
Section 220 Education Act 1989		Laying before House of Representatives of financial statements
Section 167		Gifts
Section 168(1) and (2)		Accounting records
Sections 171(1)(b) and (2) and 172		Offences and penalties
Section 176		Application of provisions of the Public Finance Act 1989
Section 178		Application of Archives Act 1957
Sections 181, 188, 191, 193, 194, 198, 199, 200		Transitional and savings provisions and associated consequential amendments

s 78

Chairperson and deputy chairperson of board

Appointment

(1) The responsible Minister may appoint 1 of the members as the chairperson, and another member as the deputy chairperson, of the board of a Crown agent or an autonomous Crown entity by written notice to the member (with a copy to the board).
(2) The Governor-General may, on the recommendation of the responsible Minister, appoint 1 of the members as the chairperson, and another member as the deputy chairperson, of the board of an independent Crown entity by written notice to the member (with a copy to the board).
(3) The notice of appointment must state the date on which the appointment takes effect.

Term of appointment

The chairperson and the deputy chairperson each hold that office until—
- (a) he or she resigns from that office; or
- (b) he or she is removed from it by the responsible Minister or the Governor-General, as the case may be; or
- (c) he or she ceases to hold office as a member; or
- (d) the term of office that may have been specified on appointment expires, unless the member is reappointed for a further term.

Resignation

(1) A chairperson or deputy chairperson may, without resigning as a member, resign from that office by written notice to the responsible Minister (with a copy to the board).
(2) The notice of resignation must state the date on which the resignation takes effect.

Removal

(1) The responsible Minister may, after consultation with the person concerned, remove a chairperson or deputy chairperson of the board of a Crown agent or an autonomous Crown entity from that office by written notice to the person (with a copy to the board).
(2) The Governor-General may, on the recommendation of the responsible Minister and after consultation with the person concerned, remove a chairperson or deputy chairperson of the board of an independent Crown entity from that office by written notice to the person (with a copy to the board).
(3) The notice of removal must state the date on which the removal takes effect.

Exercise of chairperson's functions and powers during vacancy

(1) The deputy chairperson of a statutory entity has and may exercise all of the functions and powers of the chairperson in relation to a matter if—
- (a) the chairperson is unavailable; or
- (b) the chairperson is interested in the matter.
(2) The board may, by resolution, appoint a temporary deputy chairperson, who may exercise all the functions and powers of the chairperson in relation to a matter if—
- (a) there is no deputy chairperson; or
- (b) the deputy chairperson is unavailable; or
- (c) the deputy chairperson is interested in the matter.

Procedure of board

Procedure generally

Except as otherwise provided under this or another Act, the members may regulate their own procedure.

Notice of meetings

(1) The board or the chairperson must appoint the times and places of ordinary meetings of the board, and give notice of those meetings to each member not present when the appointment is made.
(2) The chairperson or any 2 members (or, if the board consists of only 2 members, either member) may call a special meeting of the board by giving at least 5 working days' notice (or any shorter notice period that all the members agree) of the special meeting, and the business to be transacted at the meeting, to each member for the time being in New Zealand.
(3) Only the business stated in the notice of special meeting may be transacted at the special meeting.
(4) Notice of a meeting—
- (a) must be written, and state the time and place of the meeting; and
- (b) may be given by post, delivery, or electronic communication; and
- (c) must be sent to the member's last known address in New Zealand.
(5) An irregularity in a notice of a meeting is waived if all members entitled to receive the notice either—
- (a) attend the meeting without protesting about the irregularity; or
- (b) do not attend the meeting, but agree before the meeting is held to the waiver of the irregularity.

Methods of holding meetings

A meeting of the board may be held—
- (a) by a quorum of the members, being assembled together at the time and place appointed for the meeting; or
- (b) by means of audio, audio and visual, or electronic communication provided that—
  - (i) all of the members who wish to participate in the meeting have access to the technology needed to participate in the meeting; and
  - (ii) a quorum of members can simultaneously communicate with each other throughout the meeting.

Quorum

(1) A quorum for a meeting of the board is the number that is—
- (a) half the number of members (if the board has an even number of members); or
- (b) a majority of the members (if the board has an odd number of members).
(2) If the board has only 2 members, the quorum for a meeting is both members.
(3) No business may be transacted at a meeting of the board if a quorum is not present.

Special provisions for boards with only 1 member available to act

(1) This section applies while a board has only 1 member who is available (for example, because of a vacancy or because section 66, but not section 68, applies to 1 or more members).
(2) The quorum for a meeting of the board is 1.
(3) The available member—
- (a) may appoint the times and places of ordinary meetings; and
- (b) may call a special meeting; and
- (c) need not send a notice of meeting for those meetings; and
- (d) may enter into any obligation that, under section 127(2), may be entered into by 2 or more members.

Presiding at meetings

(1) At a meeting of the board, the following person presides:
- (a) if there is a chairperson and he or she is present and is not interested in the matter, the chairperson; or
- (b) if there is no chairperson or he or she is not present or is interested in the matter, the deputy chairperson; or
- (c) in any other case, the temporary deputy chairperson.
(2) A person referred to in subclause (1)(b) or (c) may exercise all the powers and functions of the chairperson for the purposes of the meeting.

Voting at meetings

(1) Each member has 1 vote.
(2) In addition to his or her general vote, the chairperson at a meeting has, in the case of an equality of votes, a casting vote.
(3) A resolution of the board is passed if it is agreed to by all members present without dissent or if a majority of the votes cast on it are in favour of it.
(4) A member present at a meeting of the board is presumed to have agreed to, and to have voted in favour of, a resolution of the board unless he or she expressly dissents from or votes against the resolution at the meeting.

Unanimous written resolutions

(1) A resolution signed or assented to in writing (whether sent by post, delivery, or electronic communication) by all members is as valid and effectual as if it had been passed at a meeting of the board duly called and constituted.
(2) The resolution may consist of several documents containing the same resolution, each signed or assented to in writing by 1 or more members.

Board may appoint committees

(1) The board may, by resolution, appoint committees—
- (a) to advise it on any matters relating to the entity's functions and powers that are referred to the committee by the board; or
- (b) to perform or exercise any of the entity's functions and powers that are delegated to the committee, if the committee includes at least 1 member of the board and any other person or persons that the board thinks fit.
(2) A person must not be appointed as a member of a committee unless, before appointment, he or she discloses to the board the details of any interest the person may have if he or she were a member of that committee.