POWERS OF BOARD

New Zealand Herald, Volume LXXII, Issue 22046, 28 February 1935, Page 13

POWERS OF BOARD

DEFENCE BY MINISTER FULL CONTROL ESSENTIAL ADVANTAGE OF SHAREHOLDERS [BY TELEGRAPH SPECIAL REPORTER] WELLINGTON, Wednesday The opinion that full authority shoul ( d be vested in members of the board of management to be set up to govorn the mortgage corporation was expressed by the Minister of Finance, Mr. Coates, in the House of Representatives to-night, when speaking to an amendment to the bill moved by the Leader of the Opposition, Mr. M. J. Savage, who sought to give the Governor-Gencral-in-Council power to amend the schedule of the corporation without reference to the board. As the clause stood, such amendments might be made only at the request of the board. Mr. Coates said the board would be composed of men chosen for a special reason, and lie thought they should have full power to manage the' affairs of the corporation without Government interference. If they were just to be "dummies," it was hardly likely that the right type of men would bo attracted. They would have far-reaching public responsibility, and such authority as was conferred on them by that section of the bill would give them an incentive to obtain a thorough granp of the situation. Board and Government "The clause will bring the Government of the day into close association with the board," said Mr. Coates, "and the board cannot have the authority it requires unless it has the support of the Government." Mr. A. S. Richards (Labour—Roskill): A board to govern the Government. Mr. Coates: Well, we'll see. Whether that is so or not it is a case where the board should have control and where it should have full responsibility for the conduct of the corporation. Mr. Poison: It puts the power in the hands of the shareholders to veto anything the Government or Governor-General-in-Council might want to do. Mr. Coates- With the incluaion of shareholders there is a great advantage in that the affairs of the board are placed before the public at the annual meeting. Continuing, Mr. Coates said that nothing had been said about the advantages of shareholders or the advantages of a shareholders' meeting. It gave them opportunity to discuss all matters concerning the corporation, and the interests of the corporation and of the country would be best served by a meeting of that kind. He thought Mi-. Poison underestimated the advantages of shareholder capital. Mr. Poison said'shareholders would decide what was to go into the schedule of the rules and how it was to be amended, while the Government with its £50,000,000 of securities would be prevented from doing so. " Half-million " Shareholders Mr. Coates: Will you say how shareholders can pass an Order-in-Council ? Mr. J. A. Lee (Labour—Grey Lynn): By the back stairs. Mr. Poison: It is in the clause, and no amount of side-stepping will .alter it. Mr. Coates: You are very offensive. Mr. Poison: I am not trying to bo rude. I am not desirous of being offensive. Perhaps you mistake my earnestness for offensiveness. Mr. Lee said that unless the amendment was carried the House was endorsing a principle whereby shareholders with a very inconsiderable amount of capital controlled, without a vote of the bondholders, money running into millions. ' "Apparently these are to be shareholders whose hearts will bleed for the people," added Mr. Lee amid laughter. "These half-million shareholders will bo hand-picked philanthropists." Mr. Coates: Who said there were to be half a million shareholders? Mr. Lee: Well, £500.000 will be provided by shareholders. Isn't the real proposal to wrest control from Parliament? Mr. Savage's amendment was lost by 36 votes to 26.