53DDisclosure of interests by board members

53D Disclosure of interests by board members (1) If a board member has a material interest in an issue being considered, or about to be considered, by the board, the member must disclose the nature of the interest at a board meeting as soon as practicable after the relevant facts come to the member’s knowledge. Note Material interest is defined in s (4). The definition of indirect interest in s (4) applies to the definition of material interest. (2) The disclosure must be recorded in the board’s minutes and, unless the board otherwise decides, the member must not— (a) be present when the board considers the issue; or (b) take part in a decision of the board on the issue. Example Albert, Boris and Chloe are members of the board. They have an interest in an issue being considered at the board meeting and they disclose the interest as soon as they become aware of it. Albert’s and Boris’s interests are minor but Chloe has a direct financial interest in the issue. The board considers the disclosures and decides that because of the nature of the interests: • Albert may be present when the board considers the issue but not take part in the decision • Boris may be present for the consideration and take part in the decision. The board does not make a decision allowing Chloe to be present or take part in the board’s decision. Accordingly, since Chloe has a material interest she cannot be present for the consideration of the issue or take part in the decision. (3) Any other board member who also has a material interest in the issue must not be present when the board is considering its decision under subsection (2).

associate, of a person, means— (a) the person’s business partner; or (b) a close friend of the person; or (c) a family member of the person. executive officer, of a corporation, means a person (however described) who is concerned with, or takes part in, the corporation’s management, whether or not the person is a director of the corporation. indirect interest—without limiting the kinds of indirect interests a person may have, a person has an indirect interest in an issue if any of the following has an interest in the issue: (a) an associate of the person; (b) a corporation if the corporation has not more than 100 members and the person, or an associate of the person, is a member of the corporation; (c) a subsidiary of a corporation mentioned in paragraph (b); (d) a corporation if the person, or an associate of the person, is an executive officer of the corporation; (e) the trustee of a trust if the person, or an associate of the person, is a beneficiary of the trust; (f) a member of a firm or partnership if the person, or an associate of the person, is a member of the firm or partnership; (g) someone else carrying on a business if the person, or an associate of the person, has a direct or indirect right to participate in the profits of the business.

material interest—a board member has a material interest in an issue if the member has— (a) a direct or indirect financial interest in the issue; or (b) a direct or indirect interest of any other kind if the interest could conflict with the proper exercise of the member’s functions in relation to the board’s consideration of the issue.