{"id":222784,"date":"2023-05-02T20:13:14","date_gmt":"2023-05-02T07:13:14","guid":{"rendered":"https:\/\/legalvision.co.nz\/?p=222784"},"modified":"2023-05-22T12:01:09","modified_gmt":"2023-05-21T23:01:09","slug":"non-executive-director","status":"publish","type":"post","link":"https:\/\/legalvision.co.nz\/corporations\/non-executive-director\/","title":{"rendered":"Duties of a Non-Executive Director in New Zealand"},"content":{"rendered":"\n

Directors of a company are responsible for managing the company\u2019s business and affairs. They have legal duties under the Companies Act<\/a><\/em> to the company that they are personally responsible for complying with. This article will outline what a non-executive director is and the legal duties they must comply with.<\/p>\n\n\n\n

What is a Non-Executive Director?<\/h2>\n\n\n\n

A non-executive director is a director who is not employed by the company and is usually not involved in the business\u2019s day-to-day operations. In comparison, an executive director usually holds a senior management position in the company, such as a CEO, CFO or CTO. They are generally deeply involved with the day-to-day operations of the business. <\/p>\n\n\n\n

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For early-stage companies in particular, a non-executive director is usually the third or subsequent director to come onto the board after the founders.<\/p>\n<\/div>\n\n\n\n

Non-executive directors typically provide strategic insight and a wealth of previous business experience and knowledge to the board of directors. Since they are not involved in the company\u2019s everyday activities, this can bring a sense of independence and objectivity to the non-executive director\u2019s input. <\/p>\n\n\n\n

A non-executive director may receive payment for their role<\/a>. Either the company\u2019s shareholders or other directors will decide how much is paid in exchange for their services. This will be outlined in the agreement between the company and the non-executive director. Typically, the non-executive director will be paid for attending and contributing to board meetings, whether this is weekly, monthly or quarterly.     <\/p>\n\n\n\n

What are a Non-Executive Director\u2019s Duties?<\/h2>\n\n\n\n

Like any other director, including executive directors, a non-executive director of a company in New Zealand must comply with their director duties<\/a>. These include the requirement to: <\/p>\n\n\n\n