BANK OF NEW ZEALAND.

Dominion, Volume 6, Issue 1789, 30 June 1913, Page 8

BANK OF NEW ZEALAND.

QUESTION OF CONTROL. MR. BEAUCHAMP STATES THE POSITION. THE SHAREHOLDERS' RIGHTS, In connection with the recent informal meeting or shareholders of tho Bonk of -Now Zealand, the cuairmau (Mr. li. lieaucliamp) snys: "As there scems i to be somo misapprehension on the point, I think it well that tlio respective positions ol tne shareholders anu tne directors of the Lank should be lnauo clear, 'l'lie founders of tho bank wero of opinion that it was better in the interests of the institution that tho shareholders should yive up the right customarily lioid by l'lie shareholders of n company to control tho policy of the board of directors. It is accordingly provided by Clauses 3 and 4 of tho Deed of Settlement of the bank as follows;— " '3. That the whole management of the business of tho company shall be, and tho same is hereby, reposed in tho l»ard of directors hereinafter more particularly mentioned; and that, subject to ilia limitations hoixin contained, and the powers hereby vested in general meetings of tho proprietors, the individual parties hereto do hereby for themselves severally and respectively, and for their several and respective heirs, executors, and administrators, renounce and disclaim all right to interfere in the management of tile affairs of-tho company, or to inspect the books of the company, or unless appointed by tho board as hereinafter provided to sign, accept, or endorso any bill, uote, or negotiable security in tho name of the company, or to enter into any other contract or engagement so as to charge or bind tho company or tho properties, funds, securities, or monies of or belonging to tho company. And each party heroto binds himself, his heirs, executors, and administrators that ho and they shall and will keep harmless and indemnified the company and their lands, goods, chattels, funds, and securities from and against all losses, costs, damages, and expenses occasioned by any contact or engagement made or entered into by him or them as aforesaid.' " '4. That it shall bo lawful for tho board, at tho expense of tlio company, to apply for and endeavour to obtain an . Act of the General Assembly of New Zealand to incorporate the company under tho name and stylo and title of "The Bank of New Zealand," and from timo to time such other Act or Acts of tho Legislature of tho said colony as tho board, may consider calculated to facilitate their legal remedies and advanco the general' interests of the company. And for tho purpose of obtaining such Act of Incorporation or such other Act or Acts as aforesaid, it shall bo competent to tho board, on behalf of the company, to comply with such conditions as may bo imposed by any such Act or Acts, anything in theso presents inconsistent with tho provisions, such conditions notwithstanding. And every provision herein contained inconsistent with the provisions of 6uch Act or Acts shall during tho continuance of the said Act or Acts be suspended and shall be of no force and effect, but after the expiration of the said Act or Acts by effluxion of time or otherwise every such provision herein contained shall bo again in full force.' "This was the position at tho time when the board was by Statute constituted as it is at present, and it is plainly the duty of the beard to take the responsibility of conducting the business of tho bank without directions from the shareholders. If the shareholders do not desiro this,, it is open to them to move under Clause 85 of the Deed of Settlement to amend tho provision.? of Clauses 3 and i ulwvo referred to. Clause 85 rends as follows:— " '85. That it shall ba lawful for the proprietors by a special resolution to make new -laws, regulations, and provisions for the company, and to amend, alter, and repeal all or any of tho existing jaws, regulations, and provisions of the compnny, provided such new amended or altered laws, regulations, and provisions do not extend to amend, alter, or repeal all or any part of the laws, regulations, and provisions established and settled by these presents for limiting the individual responsibility of tho respectivo proprietors of the' company as between thomselves.' "if the shareholders pass such a resolution, it will then be for tho Government to determine if it will exercise tho right given by "Statute to veto the resolution so passed. It will be remembered that tho Government has no voice by voting power in respect to the large shareholding interest it now has in the bank. Its shares confer no right to voto. Its interests are protected only by tho directors it nominates, and by its power of veto. "I may add," stated Mr. Bcaucliamp in conclusion, "that tho Bank of New Zealand is not the only bank in which largo powers—quite properly, I think—are vested in the Board of Directors. For example, the charter governing the Bank of Australasia provides that whilst it is necessary to obtain the assent of tho shareholders, in general meeting, to an increase in capital, tlio terms and conditions on which such capital shall be offered to shareholders are expressly reserved to the directors, who alone are responsible for the safo conduct of tho bank's business."