Fiduciary duties are obligations of trust and confidence owed by a fiduciary to another person. The law usually recognises certain relationships, including those of director and company and employer and employee, to be fiduciary relationships. The courts may also find other relationships to be fiduciary in nature, particularly where one party stands in a position of trust and confidence in relation to the other, and is bound to place the interests of the other before his or her own personal interests. As Government Board members will often be in an similar position to a company director, they may be subject to fiduciary obligations.
Company directors, and other Government Board members acting in a fiduciary capacity, have an obligation to:
Members of Government Boards must act openly and honestly at all times in the performance of their duties. They must ensure that they do not use information acquired by virtue of their position to gain directly or indirectly an advantage for themselves or any other person.
Members of Government Boards should avoid actual or potential conflicts between their duties to the Government Board and their personal interests or their duties to others. Members of Government Boards should also be aware of possible perceived conflicts of interest. The Cabinet Handbook states that:
Departments are to ask the proposed nominee(s) to declare whether there are any reasons why they should not be appointed to the relevant Government Body. Specifically, proposed nominees are to be asked to consent to disclose whether, if successful, there would be any conflicts of interest, i.e. any private interests that may affect or appear to affect the appointee's public duty.
Members of Government Boards who have or acquire directly or indirectly personal or pecuniary interest in a matter decided or under consideration by the Government Board must:
Disclosure of this information should be recorded in the minutes of the meeting of the Government Board and reported to the Minister as soon as possible after the meeting. Particular Government Boards may require members to make prior declarations of interests through completion of a Registration of Personal Interests Form (an example appears as Attachment 4).
If there is any doubt as to whether a conflict of interest exists the relevant member should err on the side of caution and declare the interest and excuse himself or herself from the room when any discussion or voting on the particular issue the subject of the conflict is taking place. Further, certain officers defined as ‘designated persons’ under the Integrity Act 2009 can seek the confidential advice of the Integrity Commissioner about conflicts of interest (see Chapter 7.9 of this Guide).
Because of their position of trust, member's actions and standards of behaviour are required to be exemplary. Members should always act bona fide in the interests of the Government Board and never in their own interest or to pursue personal agendas. Members are expected to act in the best interests of the Government Board, the state and the community.
Members of Government Boards have to ensure that they exercise diligence, care and skill in the performance of their duties. They must also take reasonable steps to inform themselves about the functions of the Government Board, its business and activities and the circumstances in which it operates. A member must give close attention to Government Board affairs. A member should obtain sufficient information and advice, and exercise an active discretion at all times to enable him/her to make conscientious and informed decisions. A member should also maintain confidentiality of Government Board discussions and of information made available to them, such as Government Board papers.