Roles and Responsibilities of Councillors 2000
Gavin Adlam
BCA, LLB Wellington, New Zealand
Barrister and Solicitor Tel: 64-21-610 772
Fax: 64-4-475 7187
27 January, 2000 Email: jgadlam@actrix.gen.nz
THE INTERNET SOCIETY OF NEW ZEALAND INC.
ROLES AND RESPONSIBILITIES OF COUNCILLORS
1. ISOCNZ:
- is a legal entity (Incorporated Society)
- is made up of, and distinct from, its members
- has assets and liabilities, rights and obligations
- is based on perpetual succession ? ISOCNZ has a "life" of its own
- has rules ? the Articles of Association
2. MEMBERS:
- have membership rights and obligation
- are entitled to formal reports
- can vote and make formal decisions
- elect the Council
- have no rights or responsibilities of management
3. COUNCIL: (the driving force ? mind and will of the enterprise):
- has directing/management responsibilities
- links membership with ?management?
- is responsible to the Society (decisions must be in the best interests of the Society)
- must practice ?due diligence?/?due enquiry?
- has access to confidential and sensitive information
- must declare other relevant interests
- must avoid conflicts of interest
- has fiduciary obligations (for definition of fiduciary see under "Councillors")
- must report to the members
- is responsible for Society?s compliance with general law and legal obligations
- may delegate functions to committees or officers or management ? but Council as a whole remains responsible
- must apply discretion in management matters, reporting, disclosure
4. COUNCILLORS:
- Personal fiduciary obligations:
[Fiduciary: "obligations towards someone else in which the fiduciary is bound to act in all respects for the advantage of the beneficiary and may not take a personal advantage even if that is not detrimental to the beneficiary" (for example the obligation of a Trustee towards a Beneficiary, a Solicitor to a Client, or an Agent to a Principal). In this case the beneficiary is the Society.]
- Confidentiality:
The issues are broader than those relating to the "inner workings of Council" and the relationship between Council and the Membership, i.e., "democracy" issues. Much of the information received by Council is given by contracting parties, eg, Domainz, or is employees? personal information, and is therefore confidential by virtue of contractual relationships.
In general, information which comes from other parties is confidential unless those other parties consent (expressly or by implication) to it being disclosed. ISOCNZ internal information may be confidential unless Council formally declares otherwise.
One consequence is that, if Council chooses to make public confidential information which comes from other parties, contracting parties may choose to provide less information so that Council will not be able to publish it.
For example, Domainz provides confidential and sensitive information in the performance of a contract, so making such material public is not at the discretion of Council.
- Actions and decisions should be for the Society?s benefit.
- Conflicts of Interest (may be personal advantage or conflict of obligations):
Councillors should avoid compromising themselves when information is to be provided which could lead to a conflict of interest. A conflict may arise where councillors could use the information for personal advantage, or would be bound by conflicting duties, eg, to use or disclose the information for the benefit of some other person or organisation (if they are a director of a company or member of a partnership). Councillors may avoid such conflict by declaring a "Conflict of Interest" but in some cases they will need to avoid receiving the information in the first place.
- Limits to personal agendas
- collective responsibilities
- bound by collective decisions ? it may be inappropriate to go outside Council if a member disagrees with a Council ruling. The appropriate action may be to support, or resign from Council.
5. RELATIONSHIP WITH OTHER PEOPLE AND ENTITIES
NZIRL (Domainz) ? ISOCNZ is:
- sole shareholder of the company
- party to the relationship contract
(a) ISOCNZ as Shareholder:
Rights of shareholder :
- control major decisions/directions
- appoint directors
- receive reports
- NOT directors/managers
- nominate shareholder?s representative for SGM?s/AGM?s
Role of ISOCNZ Council/Executive Director to exercise shareholder functions:
- holds NZIRL Board accountable ? no closer involvement
(b) ISOCNZ?s Contractual Relationship with NZIRL:
- Roles agreed
- Performance, monitoring, reports
- Role of ISOCNZ Council or its delegate (a Councillor, the Chair, or the Executive Director) in contract management
- Point of contact with NZIRL: the Board or its delegate (Chair, member, Executive Director)
- Confidential and sensitive information ? by Contract ? not at the discretion of Council.
6. RESPONSIBILITIES OF THE BOARD OF THE NEW ZEALAND INTERNET REGISTRY LIMITED (Domainz):
- Direction and management of NZIRL subject to:
- shareholder direction
- legal obligations (including Contract)
- Obligations to the Company
- Act in good faith and the best interests of the Company
- Exercise powers for a proper purpose
- Act in accordance with the law (Companies Act, 1993) and Constitution
- Ensure that Company doesn?t trade recklessly (that is, in a manner likely to create a substantial risk of serious loss to creditors)
- No distribution of profits if not solvent
- Ensure that Company does not incur an obligation unless Directors believe on reasonable grounds that the Company will be able to perform
- Exercise care, diligence, and skill that a reasonable Director would exercise in the circumstances, taking into account the nature of the company, the decision, the position of the Director, and the nature of the responsibilities.
