NEW ZEALAND Law and Practice Contributed by: Graeme Quigley, Ashton Goatley and Erin Hickey, Webb Henderson
When shareholders exercise a power reserved to them by the Companies Act or the company’s constitution, the power is exercised by ordinary resolution (ie, a simple majority of votes cast on the resolution) unless otherwise specified in the relevant provision of the Companies Act or constitution. Some matters require approval by way of “special resolution” , meaning that – if the resolution is to be passed at a meeting – a majority of at least 75% of votes cast must be obtained to pass the resolution. That threshold may be increased (but not lowered) by the com - pany’s constitution. For a written (circular) resolution of sharehold - ers, the resolution must be signed by not less than 75% of the shareholders entitled to vote, who must together hold not less than 75% of the votes entitled to be cast on the resolution. A copy of such a written resolution must be sent within five working days to all shareholders who did not sign it. Decision-Making by Directors Directors may also make decisions by way of resolutions passed at meetings or by written resolution. Schedule 3 to the Companies Act sets out the default rules for directors’ meetings, including: • requirements for notice (two business days); • the required quorum (a majority of directors); • means of attendance (in person or by audio or audiovisual communication); and • voting (only a majority decision by directors present at the meeting is required, with each director having one vote – the chair does not have a casting vote). The board must ensure that minutes of all direc - tors’ meetings are kept.
Directors may also pass a written (circular) reso - lution. Unless the company’s constitution speci - fies otherwise, this must be signed or assented to by all the directors entitled to receive notice of a directors’ meeting.
4. Directors and Officers 4.1 Board Structure
Under the Companies Act, companies have a single board. Boards may appoint committees to take responsibility for particular aspects of the business or the governance of the compa - ny, and the Listing Rules require listed compa - nies to have an audit committee. The Corporate Governance Code also recommends that listed companies have a remuneration committee and a nomination committee. 4.2 Roles of Board Members The Companies Act only provides for one class of director, meaning that all directors have the same fundamental role. However, in practice, committee memberships can mean that direc - tors are more involved in certain aspects of the business or its governance than other areas. In addition, the company’s constitution may (if desired) specify different categories of directors. Usually, the board will elect a chair. The default position under the Companies Act is that the chair does not have a casting vote. 4.3 Board Composition Requirements/ Recommendations The Companies Act requires every company incorporated in New Zealand to have at least one director that lives in either New Zealand or an “enforcement country” . If living in an enforce - ment country, the director must also be a direc - tor of a body corporate that is incorporated in that enforcement country under a law equivalent
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