The Incorporated Societies Act 2022 (the “new Act”) introduces changes to the governance of societies. This article will cover some of these, but we will discuss the changes in more detail during the upcoming Legalwise programme Incorporated Societies: Requirements Post the New Act. Follow the series here.
Part 4. Changes to governance
Under section 45 of the new Act a society must have a committee. Section 5 of the new Act explains the committee is the governing body of the society, no matter how that body is described (for example, a board). The committee is responsible for managing the operation or affairs of the society and must include 3 or more qualified officers, a majority of which are members of the society or representatives of bodies corporate that are members of the society. Under section 26 of the new Act the number of members that must or may be on the committee must be included in a society’s constitution.
Section 47 of the new Act explains the qualifications of an officer, which include that the officer:
- is a natural person;
- has consented in writing to be an officer; and
- certifies they are not disqualified under section 47(3) of the new Act.
- a natural person occupying a position that allows them to exercise significant influence over the management or administration of the society (such as a treasurer or chief executive); or
- any other natural person who is declared to be an officer by regulation.
- a duty to act in good faith and in the society’s best interests;
- a duty to exercise powers for a proper purpose;
- a duty to comply with the society’s constitution and the new Act;
- a duty of care;
- a duty not to create substantial risk of serious loss to creditors; and
- duty not to agree to the society incurring obligations that it cannot perform.
The officer’s duties are owed to the society, not members. Some MPs criticised the final two duties in the last reading of the Bill, arguing they are better suited to a commercial context where directors are well compensated.
The new Act has not radically changed the personal liability of officers, as the officer’s duties set out above were already enforced by the court. The new Act does, however, explicitly mention that an officer is liable where they contravene a banning order disqualifying them from being an officer (see subpart 7 of part 4 of the new Act). Additionally, when a society is deregistered the liability of officers for any act or omission while the society was registered is unaffected according to section 183 of the new Act. The offences in sections 154-157 of the new Act apply directly to officers, but these offences do not introduce brand new liability for officers as they supplement the dishonesty provisions in the Crimes Act 1961.
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Steven is a partner at Parry Field Lawyers based in their commercial team and actively supporting clients across the country. He has 20 years’ experience practising in New Zealand, England, Australia and Japan and often helps start-ups, investors, tech companies, charities and purpose driven businesses. He has a focus on empowering impact and often helps clients get their legal structures right.
He published the book: “Social Enterprises in New Zealand: A Legal Handbook” and another called “Laying Foundations for Reimagining Business”. To educate and grow the impact ecosystem he hosts a weekly podcast “Seeds” www.theseeds.nz interviewing inspiring people with more than 310 interviews and more than 155,000 listens. He is also the host of Board Matters, a governance focussed podcast released by the Institute of Directors of New Zealand.
Steven is an Edmund Hillary Fellow and frequent writer for publications like Stuff and Spinoff. He grew up in Christchurch and graduated from Canterbury University. He currently holds a practising certificate for New Zealand but is also qualified in England & Wales and New South Wales. After 3 years working at a national law firm in Wellington, Steven spent 11 years overseas working for international law firm Norton Rose Fulbright in Tokyo (4 years), London (3 years) and Sydney (4 years) before returning to New Zealand at the start of 2016. He brings a unique perspective and proactive approach to issues faced by clients. He works with both New Zealand and international companies with a strong focus on those investing here.
Steven is currently on a few boards and has some other involvements, such as:
- Member of Charities Services Sector Group;
- Chair of Community Finance (recently raised $95 million for social housing);
- Member of XRB Advisory Panel;
- APAC Regional Chair for Global Alliance of Impact Lawyers;
- Facilitator for IOD legal portion of Company Director Course;
- Trustee of Whanau Whenua Whare Trust
Connect with Steven via email or LinkedIn 
Sophie works in our purpose driven team assisting many charities, for purpose organisations and companies. She works with Steven Moe on impact driven clients and enjoys doing meaningful work that helps clients such as assisting to review rules for Incorporated Societies, considering structure options or setting up charitable trusts. Sophie joined Parry Field Lawyers having graduated from the University of Canterbury with an LLB with first class Honours and BA with a double major in French and European & European Union Studies. Connect with Sophie via LinkedIn
