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Future Fund Bill 2006

Part 4 The Future Fund Board of Guardians

Division 1 Introduction

33   Simplified outline

                   The following is a simplified outline of this Part:

•      This Part establishes the Future Fund Board of Guardians.

•      The Future Fund Board of Guardians is responsible for deciding how to invest the Future Fund.

•      The Board consists of a Chair and 6 other members.

•      An asset held by the Board is held for and on behalf of the Commonwealth.

•      Board members must act in good faith.



 

Division 2 Establishment and functions of the Future Fund Board of Guardians

34   Establishment of the Future Fund Board of Guardians

                   The Future Fund Board of Guardians is established by this section.

35   Board’s functions

                   The Board has the following functions:

                     (a)  to invest amounts in accordance with this Act;

                     (b)  such other functions as are conferred on the Board by this Act;

                     (c)  to do anything incidental to or conducive to the performance of any of the above functions.

36   Board’s ordinary powers

             (1)  The Board has power to do all things necessary or convenient to be done for or in connection with the performance of its functions, other than the power to lease the whole or any part of any land or building for the purposes of the Board.

             (2)  The Board’s powers include, but are not limited to, the power to enter into contracts.

Example:    A contract of insurance.

             (3)  Any real or personal property held by the Board is held for and on behalf of the Commonwealth.

             (4)  Any money received by the Board is received by the Board for and on behalf of the Commonwealth.

37   Board is a body corporate

             (1)  The Board:

                     (a)  is a body corporate with perpetual succession; and

                     (b)  must have a seal; and

                     (c)  may acquire, hold and dispose of real and personal property; and

                     (d)  may sue and be sued in its corporate name.

Seal

             (2)  The seal of the Board must be kept in such custody as the Board directs, and must not be used except as authorised by the Board.

             (3)  All courts, judges and persons acting judicially must:

                     (a)  take judicial notice of the imprint of the seal of the Board appearing on a document; and

                     (b)  presume that the document was duly sealed.

38   Membership

             (1)  The Board consists of the following members:

                     (a)  a Chair;

                     (b)  6 other members.

Note:          Section 18B of the Acts Interpretation Act 1901 deals with the title of the Chair.

             (2)  Board members are to be appointed by the responsible Ministers by written instrument.

Note:          For re-appointment, see subsection 33(4A) of the Acts Interpretation Act 1901 .

             (3)  A person is not eligible for appointment as a Board member unless the responsible Ministers are satisfied that the person has:

                     (a)  substantial experience or expertise; and

                     (b)  professional credibility and significant standing;

in at least one of the following fields:

                     (c)  investing in financial assets;

                     (d)  the management of investments in financial assets;

                     (e)  corporate governance.

             (4)  A person is not eligible for appointment as a Board member if the person is:

                     (a)  an employee of the Commonwealth; or

                     (b)  an employee of a statutory authority of the Commonwealth; or

                     (c)  an employee of a Commonwealth company; or

                     (d)  the holder of a full-time office under a law of the Commonwealth.

Note:          A Board member is not an employee of the Commonwealth. A Board member holds a part-time office under a law of the Commonwealth.

39   Application of the Corporations Act 2001

             (1)  The Board is taken to be an exempt public authority for the purposes of the Corporations Act 2001 .

             (2)  To avoid doubt, the Board is taken to be an instrumentality of the Crown in right of the Commonwealth for the purposes of section 5A of the Corporations Act 2001 .



 

Division 3 Terms and conditions for Board members

40   Term of appointment and related matters for Board members

             (1)  A Board member is to be appointed on a part-time basis.

             (2)  A Board member holds office for the period that is specified in the instrument of appointment. The period must not exceed 5 years.

Note:          For re-appointment, see subsection 33(4A) of the Acts Interpretation Act 1901 .

41   Remuneration and allowances of Board members

             (1)  A Board member is to be paid the remuneration that is determined by the Remuneration Tribunal. If no determination of that remuneration by the Tribunal is in operation, the Board member is to be paid the remuneration that is determined by the responsible Ministers.

             (2)  A Board member is to be paid the allowances that are prescribed.

             (3)  This section has effect subject to the Remuneration Tribunal Act 1973 .

42   Leave of absence of Board members

             (1)  The nominated Minister may grant leave of absence to the Chair on the terms and conditions that the nominated Minister determines.

             (2)  The Chair may grant leave of absence to another Board member on the terms and conditions that the Chair determines.

43   Resignation of Board members

                   A Board member may resign his or her appointment by giving the responsible Ministers a written resignation.

44   Termination of appointment of Board members

             (1)  The responsible Ministers may terminate the appointment of a Board member for misbehaviour or physical or mental incapacity.

             (2)  The responsible Ministers may terminate the appointment of a Board member if:

                     (a)  the Board member:

                              (i)  becomes bankrupt; or

                             (ii)  applies to take the benefit of any law for the relief of bankrupt or insolvent debtors; or

                            (iii)  compounds with his or her creditors; or

                            (iv)  makes an assignment of his or her remuneration for the benefit of his or her creditors; or

                     (b)  the Board member is absent, except on leave of absence, from 3 consecutive meetings of the Board; or

                     (c)  the Board member contravenes section 56, 57, 58, 59, 60, 61 or 62; or

                     (d)  the Board member fails, without reasonable excuse, to comply with section 68, 69 or 71; or

                     (e)  the responsible Ministers are satisfied that the performance of the Board member has been unsatisfactory for a significant period.

45   Other terms and conditions of Board members

                   A Board member holds office on the terms and conditions (if any) in relation to matters not covered by this Act that are determined by the responsible Ministers.

46   Acting Board members

Acting Chair

             (1)  The nominated Minister may appoint a person to act as the Chair:

                     (a)  during a vacancy in the office of Chair, whether or not an appointment has previously been made to the office; or

                     (b)  during any period, or during all periods, when the Chair is absent from duty or Australia, or is, for any reason, unable to perform the duties of the office.

Acting Board member (other than the Chair)

             (2)  The nominated Minister may appoint a person to act as a Board member (other than the Chair):

                     (a)  during a vacancy in the office of a Board member (other than the Chair), whether or not an appointment has previously been made to the office; or

                     (b)  during any period, or during all periods, when a Board member (other than the Chair) is absent from duty or Australia, or is, for any reason, unable to perform the duties of the office.

Qualifications

             (3)  A person is not eligible for appointment to act as:

                     (a)  the Chair; or

                     (b)  a Board member (other than the Chair);

unless the person is eligible for appointment as a Board member.

Note:          See subsections 38(3) and (4).

Validation

             (4)  Anything done by or in relation to a person purporting to act under an appointment is not invalid merely because:

                     (a)  the occasion for the appointment had not arisen; or

                     (b)  there was a defect or irregularity in connection with the appointment; or

                     (c)  the appointment had ceased to have effect; or

                     (d)  the occasion to act had not arisen or had ceased.

Note:          See section 33A of the Acts Interpretation Act 1901 .



 

Division 4 Meetings

47   Holding of meetings

             (1)  The Board is to hold such meetings as are necessary for the performance of its functions.

             (2)  The Chair:

                     (a)  may convene a meeting at any time; and

                     (b)  must convene a meeting within 30 days after receiving a written request from another Board member.

Note:          See also section 33B of the Acts Interpretation Act 1901 (participation in meetings by telephone etc.).

48   Who is to preside at a meeting

             (1)  The Chair is to preside at all meetings at which he or she is present.

             (2)  If the Chair is not present at a meeting:

                     (a)  a Board member nominated by the Chair is to preside; or

                     (b)  if no Board member is so nominated—the Board members present are to elect one of their number to preside.

49   Quorum

             (1)  At a meeting, 5 Board members form a quorum.

             (2)  Despite subsection (1), if:

                     (a)  section 71 prevents one or more Board members from participating in the deliberations, or decisions, of the Board with respect to a particular matter; and

                     (b)  as a result, there is no longer a quorum present; and

                     (c)  there are in attendance at least 3 other Board members who would be counted in determining whether a quorum is present;

those other Board members constitute a quorum for the purpose of any deliberation or decision at that meeting with respect to that matter.

50   Voting

             (1)  Decisions at a meeting must be affirmed by a majority of votes of Board members voting.

             (2)  The Board member presiding at a meeting has a deliberative vote and, in the event of an equality of votes, also has a casting vote.

51   Records of meetings

                   The Board must keep accurate records of all its meetings.



 

Division 5 Resolutions without meetings

52   Resolutions without meetings

             (1)  A resolution is taken to have been passed at a meeting of the Board if:

                     (a)  the Board has determined:

                              (i)  that resolutions may be passed in accordance with this section; and

                             (ii)  the method by which Board members are to indicate agreement with a resolution proposed to be passed in accordance with this section; and

                     (b)  without meeting, a majority of the Board members indicate agreement with the resolution in accordance with the method determined by the Board; and

                     (c)  the majority would have constituted a quorum at a meeting of the Board; and

                     (d)  either:

                              (i)  all the Board members were informed of the resolution; or

                             (ii)  reasonable efforts were made to inform all the Board members of the resolution.

             (2)  Paragraph (1)(b) does not apply to a Board member who would have been prevented by section 71 from deliberating on the resolution if the resolution had been put to a meeting of the Board.

53   Record of resolutions

                   The Board must keep a record of resolutions passed in accordance with section 52.



 

Division 6 Reporting obligations

54   Nominated Minister may require Board to prepare reports or give information

Reports

             (1)  The nominated Minister may, by written notice given to the Board, require the Board:

                     (a)  to prepare a report about one or more specified matters relating to the performance of the Board’s functions; and

                     (b)  give copies of the report to the nominated Minister within the period specified in the notice.

Information

             (2)  The nominated Minister may, by written notice given to the Board, require the Board to:

                     (a)  prepare a document setting out specified information relating to the performance of the Board’s functions; and

                     (b)  give copies of the document to the nominated Minister within the period specified in the notice.

Compliance

             (3)  The Board must comply with a requirement under subsection (1) or (2).

Publication of reports and documents

             (4)  The nominated Minister may cause to be published (whether on the Internet or otherwise):

                     (a)  a report under subsection (1); or

                     (b)  a document under subsection (2).

Reports and documents

             (5)  A report under subsection (1) is not a legislative instrument for the purposes of the Legislative Instruments Act 2003.

             (6)  A document under subsection (2) is not a legislative instrument for the purposes of the Legislative Instruments Act 2003.

55   Keeping the responsible Ministers informed etc.

             (1)  The Board must keep the responsible Ministers informed of the operations of the Board.

             (2)  The Board must give the nominated Minister such reports, documents and information in relation to those operations as are appropriate.



 

Division 7 Duties of Board members etc.

56   Care and diligence—civil obligation

             (1)  A Board member must exercise his or her powers and discharge his or her duties with the degree of care and diligence that a reasonable person would exercise if he or she:

                     (a)  were a Board member in the Board’s circumstances; and

                     (b)  occupied the office held by, and had the same responsibilities within the Board as, the Board member.

Note:          This subsection is a civil penalty provision (see section 66).

Business judgment rule

             (2)  A Board member who makes a business judgment is taken to meet the requirements of subsection (1), and their equivalent duties at common law and in equity, in respect of the judgment if he or she:

                     (a)  makes the judgment in good faith for a proper purpose; and

                     (b)  does not have a material personal interest in the subject matter of the judgment; and

                     (c)  informs himself or herself about the subject matter of the judgment to the extent he or she reasonably believes to be appropriate; and

                     (d)  rationally believes that the judgment is in the best interests of performing the functions of the Board.

The Board member’s belief that the judgment is in the best interests of performing the functions of the Board is a rational one unless the belief is one that no reasonable person in his or her position would hold.

57   Good faith—civil obligation

             (1)  A Board member must exercise his or her powers and discharge his or her duties:

                     (a)  in good faith in the best interests of performing the functions of the Board; and

                     (b)  for a proper purpose.

Note:          This subsection is a civil penalty provision (see section 66).

             (2)  A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note:          This subsection is a civil penalty provision (see section 66).

58   Use of position—civil obligation

             (1)  A Board member or a member of the staff of the Agency must not improperly use his or her position to:

                     (a)  gain an advantage for himself or herself or someone else; or

                     (b)  cause detriment to the Board’s ability to perform its functions; or

                     (c)  cause detriment to another person.

Note:          This subsection is a civil penalty provision (see section 66).

             (2)  A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note:          This subsection is a civil penalty provision (see section 66).

59   Use of information—civil obligation

             (1)  A person who obtains information because he or she is, or has been, a Board member or a member of the staff of the Agency must not improperly use the information to:

                     (a)  gain an advantage for himself or herself or someone else; or

                     (b)  cause detriment to the Board’s ability to perform its functions; or

                     (c)  cause detriment to another person.

Note 1:       This duty continues after the person stops being a Board member or a member of the staff of the Agency.

Note 2:       This subsection is a civil penalty provision (see section 66).

             (2)  A person who is involved in a contravention of subsection (1) contravenes this subsection.

Note:          This subsection is a civil penalty provision (see section 66).

60   Good faith—criminal offence

                   A Board member commits an offence if he or she:

                     (a)  is reckless; or

                     (b)  is intentionally dishonest;

and fails to exercise his or her powers and discharge his or her duties:

                     (c)  in good faith in what he or she believes to be in the best interests of the performance of the functions of the Board; or

                     (d)  for a proper purpose.

Penalty:  Imprisonment for 5 years.

61   Use of position—criminal offence

                   A Board member or a member of the staff of the Agency commits an offence if he or she uses his or her position dishonestly:

                     (a)  with the intention of:

                              (i)  directly or indirectly gaining an advantage for himself or herself or someone else; or

                             (ii)  causing detriment to the ability of the Board to perform its functions; or

                            (iii)  causing detriment to another person; or

                     (b)  recklessly as to whether the use may result in:

                              (i)  him or her or someone else directly or indirectly gaining an advantage; or

                             (ii)  causing detriment to the ability of the Board to perform its functions; or

                            (iii)  causing detriment to another person.

Penalty:  Imprisonment for 5 years.

62   Use of information—criminal offence

                   A person who obtains information because he or she is, or has been, a Board member or a member of the staff of the Agency commits an offence if he or she uses the information dishonestly:

                     (a)  with the intention of:

                              (i)  directly or indirectly gaining an advantage for himself or herself or someone else; or

                             (ii)  causing detriment to the ability of the Board to perform its functions; or

                            (iii)  causing detriment to another person; or

                     (b)  recklessly as to whether the use may result in:

                              (i)  him or her or someone else directly or indirectly gaining an advantage; or

                             (ii)  causing detriment to the ability of the Board to perform its functions; or

                            (iii)  causing detriment to another person.

Penalty:  Imprisonment for 5 years.

63   Compliance with statutory duties

             (1)  A Board member does not contravene section 57, 58 or 59, or commit an offence against section 60, 61 or 62, by doing an act that another provision of this Act requires the Board member to do.

             (2)  The Chair does not contravene section 57, 58 or 59, or commit an offence against section 60, 61 or 62, by doing an act that:

                     (a)  another provision of this Act; or

                     (b)  the Financial Management and Accountability Act 1997 ; or

                     (c)  regulations or orders under the Financial Management and Accountability Act 1997 ;

requires the Chair to do.

64   Interaction of sections 56 to 62 with other laws etc.

                   Sections 56 to 62:

                     (a)  have effect in addition to, and not in derogation of, any rule of law relating to the duty or liability of a person because of his or her office as a Board member or employment in relation to the Agency; and

                     (b)  do not prevent the commencement of proceedings for a breach of duty, or in respect of a liability, referred to in paragraph (a).

This section does not apply to subsection 56(2) to the extent to which it operates on the duties at common law and in equity that are equivalent to the requirements of subsection 56(1).

65   Reliance on information or advice provided by others

                   If:

                     (a)  a Board member relies on information, or professional or expert advice, given or prepared by:

                              (i)  a member of the staff of the Agency whom the Board member believes on reasonable grounds to be reliable and competent in relation to the matters concerned; or

                             (ii)  a professional adviser or expert in relation to matters that the Board member believes on reasonable grounds to be within the person’s professional or expert competence; or

                            (iii)  another Board member in relation to matters within the Board member’s authority; or

                            (iv)  a committee of Board members on which the Board member did not serve in relation to matters within the committee’s authority; and

                     (b)  the reliance was made:

                              (i)  in good faith; and

                             (ii)  after making proper inquiry if the circumstances indicated the need for inquiry; and

                     (c)  the reasonableness of the Board member’s reliance on the information or advice arises in proceedings brought to determine whether a Board member has performed a duty under this Division, or an equivalent general law duty;

the Board member’s reliance on the information or advice is taken to be reasonable unless the contrary is proved.

66   Consequences of breach of duty—additional effect of the Commonwealth Authorities and Companies Act 1997

                   The following provisions (the CAC Act consequences provisions ):

                     (a)  subsections 6(2), (3) and (4) of the Commonwealth Authorities and Companies Act 1997 ;

                     (b)  section 27C of that Act;

                     (c)  Schedule 2 to that Act;

have effect as if:

                     (d)  in addition to the provisions specified in subclause 1(1) of Schedule 2 to that Act, the following provisions were also specified in that subclause:

                              (i)  subsection 56(1) of this Act;

                             (ii)  subsections 57(1) and (2) of this Act;

                            (iii)  subsections 58(1) and (2) of this Act;

                            (iv)  subsections 59(1) and (2) of this Act; and

                     (e)  each reference in the CAC Act consequences provisions to an officer or director of a Commonwealth authority included a reference to a Board member; and

                      (f)  each reference in the CAC Act consequences provisions to a Commonwealth authority included a reference to the Board.

Note 1:       Section 27C of the Commonwealth Authorities and Companies Act 1997 is about disqualification orders.

Note 2:       Schedule 2 to the Commonwealth Authorities and Companies Act 1997 is about the consequences of contravening civil penalty provisions.

Note 3:       Sections 11, 22, 23, 24 and 25 of the Commonwealth Authorities and Companies Act 1997 do not apply in relation to the Board or Board members. This is because the Board is not a Commonwealth authority.

67   Insurance for certain liabilities of Board members

             (1)  Except as provided in subsection (2), the Board may insure a person who is or has been a Board member against liabilities incurred by the person as a Board member.

             (2)  The Board must not pay, or agree to pay, a premium for a contract insuring a person who is, or has been, a Board member against a liability (other than one for legal costs) arising out of:

                     (a)  conduct involving a wilful breach of duty in relation to the Board; or

                     (b)  a contravention of section 58 or 59.

This subsection applies to a premium whether it is paid directly or through an interposed entity.

             (3)  This section does not authorise anything that would otherwise be unlawful.

             (4)  Anything that purports to insure a person against a liability is void to the extent that it contravenes this section.



 

Division 8 Conflict of interests

68   Material personal interest—Board member’s duty to disclose

Board member’s duty to notify other Board members of material personal interest when conflict arises

             (1)  A Board member who has a material personal interest in a matter that relates to the affairs of the Board must give the other Board members notice of the interest unless subsection (2) says otherwise.

             (2)  The Board member does not need to give notice of an interest under subsection (1) if:

                     (a)  the interest relates to a contract that insures, or would insure, the Board member against liabilities the Board member incurs as a Board member (but only if the contract does not make the Board the insurer); or

                     (b)  all the following conditions are satisfied:

                              (i)  the Board member has already given notice of the nature and extent of the interest and its relation to the affairs of the Board under subsection (1);

                             (ii)  if a person who was not a Board member at the time when the notice under subsection (1) was given is appointed as a Board member—the notice is given to that person;

                            (iii)  the nature or extent of the interest has not materially increased above that disclosed in the notice; or

                     (c)  the Board member has given a standing notice of the nature and extent of the interest under section 69 and the notice is still effective in relation to the interest.

             (3)  The notice required by subsection (1) must:

                     (a)  give details of:

                              (i)  the nature and extent of the interest; and

                             (ii)  the relation of the interest to the affairs of the Board; and

                     (b)  be given at a Board meeting as soon as practicable after the Board member becomes aware of his or her interest in the matter.

The details must be recorded in the minutes of the meeting.

Effect of contravention by Board member

             (4)  A contravention of this section by a Board member does not affect the validity of any transaction or resolution.

69   Board member may give other Board members standing notice about an interest

Power to give notice

             (1)  A Board member who has an interest in a matter may give the other Board members standing notice of the nature and extent of the interest in the matter in accordance with subsection (2). The notice may be given at any time and whether or not the matter relates to the affairs of the Board at the time the notice is given.

Note:          The standing notice may be given to the other Board members before the interest becomes a material personal interest.

             (2)  The notice under subsection (1) must:

                     (a)  give details of the nature and extent of the interest; and

                     (b)  be given:

                              (i)  at a Board meeting (either orally or in writing); or

                             (ii)  to the other Board members individually in writing.

The standing notice is given under subparagraph (b)(ii) when it has been given to every Board member.

Standing notice must be tabled at meeting if given to Board members individually

             (3)  If the standing notice is given to the other Board members individually in writing it must be tabled at the next Board meeting after it is given.

Nature and extent of interest must be recorded in minutes

             (4)  The Board member must ensure that the nature and extent of the interest disclosed in the standing notice is recorded in the minutes of the meeting at which the standing notice is given or tabled.

Dates of effect and expiry of standing notice

             (5)  The standing notice:

                     (a)  takes effect as soon as it is given; and

                     (b)  ceases to have effect if a person who was not a Board member at the time when the notice was given is appointed as a Board member.

A standing notice that ceases to have effect under paragraph (b) commences to have effect again if it is given to the person referred to in that paragraph.

Effect of material increase in nature or extent of interest

             (6)  The standing notice ceases to have effect in relation to a particular interest if the nature or extent of the interest materially increases above that disclosed in the notice.

Effect of contravention by Board member

             (7)  A contravention of this section by a Board member does not affect the validity of any transaction or resolution.

70   Interaction of sections 68 and 69 with other laws etc.

                   Sections 68 and 69 have effect in addition to, and not in derogation of, any general law rule about conflicts of interest.

71   Restrictions on voting

Restrictions on voting and being present

             (1)  A Board member who has a material personal interest in a matter that is being considered at a Board meeting must not:

                     (a)  be present while the matter is being considered at the meeting; or

                     (b)  vote on the matter;

unless:

                     (c)  subsection (2) or (3) allows the Board member to be present; or

                     (d)  the interest does not need to be disclosed under section 68.

Participation with approval of other Board members

             (2)  The Board member may be present and vote if Board members who do not have a material personal interest in the matter have passed a resolution that:

                     (a)  identifies the Board member, the nature and extent of the Board member’s interest in the matter and its relation to the affairs of the Board; and

                     (b)  states that those Board members are satisfied that the interest should not disqualify the Board member from voting or being present.

Participation with Ministerial approval

             (3)  The Board member may be present and vote if the Board member is so entitled under a declaration or order made by the responsible Ministers under section 72.

Effect of contravention by Board member

             (4)  A contravention by a Board member of:

                     (a)  this section; or

                     (b)  a condition attached to a declaration or order made by the responsible Ministers under section 72;

does not affect the validity of any resolution.

72   Ministerial power to make declarations and class orders

Ministerial power to make specific declarations

             (1)  The responsible Ministers may declare in writing that a Board member who has a material personal interest in a matter that is being, or is to be, considered at a Board meeting may, despite the Board member’s interest, be present while the matter is being considered at the meeting, vote on the matter, or both be present and vote. However, the responsible Ministers may only make the declaration if:

                     (a)  the number of Board members entitled to be present and vote on the matter would be less than the quorum for a Board meeting if the Board member were not allowed to vote on the matter at the meeting; and

                     (b)  the matter needs to be dealt with urgently, or if there is some other compelling reason for the matter being dealt with at the Board meeting.

Note:          For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901 .

             (2)  The declaration may:

                     (a)  apply to all or only some of the Board members; or

                     (b)  specify conditions that the Board or Board member must comply with.

             (3)  The declaration is not a legislative instrument for the purposes of the Legislative Instruments Act 2003 .

Ministerial power to make class orders

             (4)  The responsible Ministers may make an order in writing that enables Board members who have a material personal interest in a matter to be present while the matter is being considered at a Board meeting, vote on that matter, or both be present and vote. The order may be made in respect of a specified class of Board members, resolutions or interests.

Note:          For variation and revocation, see subsection 33(3) of the Acts Interpretation Act 1901 .

             (5)  The order may be expressed to be subject to conditions.

             (6)  The nominated Minister must cause a copy of the order to be published on the Internet.

             (7)  The order is not a legislative instrument for the purposes of the Legislative Instruments Act 2003 .