NEW ZEALAND Law and Practice Contributed by: Graeme Quigley, Ashton Goatley and Erin Hickey, Webb Henderson
to 6.1 Financial Reporting . If they are required to be audited, this must be done by a qualified auditor or audit firm, in accordance with applica - ble auditing and assurance standards. For that purpose, the company must appoint an audi - tor at its annual meeting to hold office until the close of the next annual meeting. The auditor is automatically reappointed at each subsequent annual meeting unless they resign or cease to be qualified or the company passes a resolution to replace them. A director or employee of the company (or a partner or employee of any such person) may not be appointed or act as an auditor of the company. The directors must ensure that the auditor has access to the accounting records of the com - pany at all times. The auditor may require a director or employee of the company to provide such information and explanations as the audi - tor thinks necessary for the performance of the auditor’s duties. The directors must also ensure that the auditor is allowed to attend any share- holder meeting, receives all notices and other communications to shareholders regarding the meeting, and is permitted to speak at the meet - ing on any part of the business of the meeting that concerns the auditor. 7.2 Requirements for Directors Concerning Management Risk and Internal Controls As noted in 4.8 Consequences and Enforce- ment of Breach of Directors’ Duties , the busi- ness and affairs of the company are required to be managed by – or under the direction or super - vision of – the board. Directors must exercise the care, diligence and skill that a reasonable director would exercise (see 4.6 Legal Duties of Directors/Officers ). This requires directors to
keep themselves apprised of the business risks faced by the company. The Corporate Governance Code recommends that: • listed companies have a risk management framework (a summary of which should be included in the issuer’s annual report); • the board receives and reviews regular reports; and • the issuer reports on the material risks – spe - cifically, health and safety risks – facing the business and how these are being managed. The Health and Safety at Work Act 2015 (the “HSW Act” ) requires “person conducting a busi- ness or undertaking” (eg, a company) to ensure – as far as is reasonably practicable – the health and safety of all its workers while they are at work and that the health and safety of other persons is not put at risk from that work. The company and its directors can be found liable for breaches of the HSW Act, including where risks are not appropriately managed and systems are not set up to minimise risks. For NZX-listed companies, the Listing Rules require disclosure of “material information” to the market immediately after a director or sen - ior manager knew – or reasonably ought to have known – the information (unless an exception applies). This requires boards to have appropri - ate arrangements in place to ensure that any such information does in fact become known to a director or senior manager and can be released to the market as required.
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