BANK OF NEW ZEALAND.

Auckland Star, Volume XLIV, Issue 155, 1 July 1913, Page 6

BANK OF NEW ZEALAND.

POWERS OF DIRECTORS. STATEMENT BY CHAIRMAN. (By Telegraph.—Special Reporter.) WELLINGTON, Alonday. The .chairman of the Bank of New Zealand (-Air. H. Bea-ueiiamp) has made tne following statement, deuuing the powers of the directors with particular reierence to the proceedings at the annual meet•- --• ng: — "As there seems to be some misapprehension ,ou the point I think it well that the respective positions of the shareholders and the directors of the bank should be made clear. The founders of the bank were of opinion that it was better in the interest* of the institution that the shareholders should give up the right customarily held by the

shareholders of a company to control the policy of the Board of Directors. It is accordingly provided 'by clauses 3 and 4 of the deed of settlement of the bank, as "follows:—

1 "(J)'That the whole management of the business of the company shall be reposed in the Board of Directors, and that subject to the limitations herein contained and the powers hereby vested in general meetings of the proprietors, the individual parties hesreto do renounce all right to interfere in the management of the affairs of the company or to inspect the books of the company, or unless appointed by the board as hereinafter provided to sign, accept, or endorse any bill, note, or negotiable security in the name of the company, or to enter into any other contract or engagement so as to charge or bind the company or the properties, funds, securities, or moneys of or belonging to the company.' " (4) 'Tlirtl. it shall be lawful for the board, -at the expense of the company, to apply for and endeavour to obtain an Act of the General Assembly of Xew Zealand of " The Bank of New Zealand," and from time to time snch other Act or Acts of the Legislature as the board may consider calculated to facilitate their 3ega.l remedies, and advance the general interests of the company, and for the purpose of obtaining snch Act of incorporation or such other Act or Acts as aforesaid, it shall be competent to the boaTd ou behalf of tbe company to comply with such conditions as may be imposed by any such Act or Acts.' " This was the position at the time when the board was by statute constituted as it is at present, and it is plainly the duty of the board to take the responsibility of conducting the business of the bank without directions from the shareholders. If the shareholders do not desire this it is open to them to move under clause 85 of the deed of settlement to amend the provisions of clauses 3 and 4 above referred to. Clause So reads as follows:—■ "(85) 'That it shall lie 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 the existing laws, regulations and provisions, 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 the rcspeftive proprietors of the company as between themselves.'

" If the shareholders pass such a resolution it will fhen be for the Government to determine if it will exercise the right given by statute to veto the resolution so passed. It will be remembered that the Government has no voice by voting power in respect to the large shareholding interests now in the hank. Its interests are protected only by the directors it nominates, and by its power of veto. " I may add," stated Mr. Beauchanrp, in conclusion, " that the Bank of Xew Zealand is not the only bank in which large powers—quite properly I think— are vested in the board of directors. For example, the cliartcr uovenring the Bank of Australasia provides that while it is necessary to obtain the assent of the shareholders in a general meeting to an increase in capital, the terms! and condition- on which such capital shall foe offered to sharehoWers are expressly- reserved to the directors, who alone are responsible for the safe conduct of the bank's business."

BANKIHG BILL. THE INTERESTS TO CONSULT. (By Telegraph.—Parliamentary Reporter.) WELLINGTON, Monday. As the proposals of the Bank of N«w Zealand directors in regard to the bank's capital have aroused so much interest, your correspondent approached the Prime Minister to-night to ascertain how far the Government has gone in the preparation of its promised legislation. "It is for the Bank "of New Zealand directors to approach the Government further in tbe matter," explained Mr Massey. 'They have already been in touch with us, but the bill is not yet in course of preparation."

"Is it to he assumed from this." I asked, "that the Government is going to simply carry out the suggestions of the directors ?''

'"The Government is not going to merely frame its bill at the direction of any one interest," replied the Prime Minister. "We have to look at the matter from the wider viewpoint of the interests of the State.