RESERVE BANK BOARD

Evening Star, Issue 22973, 2 June 1938, Page 2

RESERVE BANK BOARD

TWO DIRECTORS TO RETIRE BALLOT AMONG ALL MEMBERS APPARENT ANOMALIES IN PROCEDURE Two members of the Board of Directors of the Reserve Bank of New Zealand will retire from office next month. This will be in accordance with the reconstitution of the board provided for by the Reserve Bank of New Zealand Amendment Act, which was one of the earliest pieces of legislation put through Parliament by the Labour Government. The retirement will be decided by ballot, and will become effective on July 31. There are some unusual aspects arising from the procedure which has.to be followed to secure the retirement of the original members of the board (says the Christchurch ‘Press’). For instance, it appears that the entire board can take part in the ballot which periodically must occur until the reconstitution is complete. This means that the new members of the board—in this case two members who have been on the board for less than two years—are able to ballot for the displacing of members wdio have been there since 1934. This, it is claimed, is one anomaly arising from the change made by tlJe Labour Government. The new members —Messrs George Lawn and Mark Silverstone—are Labour nominees who replaced members displaced in the first ballot in 193 G, and are in a position to vote for the retirement of members, who were original directors when the Reserve Bank was launched in 1934 by the Coalition Government. BELOW ORIGINAL NUMBER. Another unusual position; arises over the actual constitution of the board. One director had to retire in the 1937 ballot. It fell to Mr 1). A, Ewen, who was one of the original State directors, to relinquish his office in this way. But ho has not yet been replaced, and apparently Iris retirement has not yet even been announced officially. That means that the board, outside the ex officio directors, is now one member short. And there appears to be nothing in the amended legislation to prevent the Government from carrying on with fewer members on the board than the seven originally provided for. Originally the Act provided for the retirement of one of the three State directors by ballot every two years from July 31, 1936, subsequent appointments to be for five years. The arrangement for shareholders’ directors w'as that one should retire annually by ballot, as from July 31, 1936, and that the vacancies thus created should be filled by a vote of shareholders, the term of office of every elected member being five years. LABOUR CHANGES. The Labour Government’s amendments cancelled the private shareholdings in the bank and removed any distinction between State and shareholders’ directors. The amending’ Act laid down new provisions for the retirement of the directors. Two directors had to retire by ballot in 1936, the year of the change, and Messrs Begg and Norton Francis relinquished office in that fashion. Messrs George Lawn and Mark Silverstone were appointed to those vacancies. One director had to retire last year, and the ballot led to the retirement of Mr I). A. Ewen, who was one of the original State directors. Two more of the original directors retire this year by ballot on July 31, and one on the same date of 1939 and 1940. Members appointed to fill the vacancies can hold office without reappointment for five years. Any ordinary member of the hoard may bo reappointed. COMPLETE EXTINCTION, Under the Reserve Bank Amendment Act, tlie reappointment of the original directors would he possible, but so far the Government has followed a policy of making new appointments. It seems very likely then that by 1940 the old board will be entirely retired. But the anomalous position arising in the forthcoming ballot, with new members voting with old members for the retirement of two of the original directors, will operate in accentuated form if the Government replaces the forthcoming vacancies with new men. It is claimed that the fairer procedure to follow would have been for the ballot, which decides the retirements, to have been confined to members of the hoard in office' when the amendment was made. The present membership of the Board of Directors of the bank is:—■ Messrs Leslie Lefeanx W. F. L. Ward (deputy-governor), J. G. Duncan. R. J. Hudson, E. Anderson, E. J. Herrick, M. Silverstone, and G. Lawn. Messrs Duncan, Anderson, Hudson, and Herrick are the remaining members of the board who were original directors, and it is from their ran.Vs that the two members to retire this year will be taken. It is only the original members of the board who come under this ballot system of retirement. Mr G. C. Rodda (Secretary of the Treasury) is a member of the board without voting power.