Director safety: 'I don’t want to have to break the law to protect myself'

Friday, 21 April 2023

‘I don’t want to have to break the law to protect myself’, says a businesswoman who is breaking the law by not having her home address on the Companies Register.

Law changes to help keep companies directors safe are taking too long for an Auckland businesswoman, leaving her feeling she has no choice but to lie to the Companies Office to protect herself.

Fearing for her safety from a man who had acted violently towards her, she decided not to enter her real home address on the publicly-searchable Companies Register.

The woman, whom Stuff has chosen not to name, had recently moved house, but decided not to update her home address.

She’d asked for her address to be withheld, but the Companies Office said she needed a protection order, or a sealed court order, before her address could be removed from the register.

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“Any other documentation of threat or abuse is deemed unacceptable,” she said.

Seeking a court order would inevitably reveal her home address to the man, she said.

“I don’t want to have to break the law to protect myself. I simply want the right to petition to have my address removed,” she said.

Kirsten Patterson, chief executive of the Institute of Directors, says she has heard of directors hiding their home addresses out of fear of being subjected to violence.

She said it took nearly five months for the Companies Office to answer her request.

The woman had asked Labour MP Sarah Pallett for help. Pallet contacted Commerce and Consumer Affairs Minister David Clark, who assured her change was on the way.

But in a letter to Pallett in January, Clark, who has now been replaced as Commerce and Consumer Affairs Minister, said that while he had hoped to get draft laws ready by November, “the demands on the Parliamentary Counsel Office have been significant recently, and so I have not been able to keep to this timeframe”.

On Friday, new Commerce and Consumer Affairs Minister Duncan Webb said the Parliamentary Counsel Office and MBIE were working on finalising an exposure draft for public consultation later this year.

The Institute of Directors (IoD) has been campaigning for many years for directors to be allowed to keep their addresses off the register.

But IoD chief executive Kirsten Patterson said the issue had become bundled up with law reforms designed to prevent companies and trusts being used as fronts by criminals, which had yet to be tabled in Parliament.

The Corporate Governance (Transparency and Integrity) Bill would herald the introduction of unique director ID numbers, which every director would have to have.

Once they were introduced, directors would be able to list addresses for service on the register, instead of home addresses.

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Despite Australia and New Zealand Governments concluding that director ID numbers were a good idea, Australia has moved much faster. In November, the first directors in Australia were issued with director ID numbers.

The Australian Government identified in September 2017 that ID numbers were a way of preventing businesspeople, both local and foreign, from using tactics such as multiple aliases, or different spellings of their names, to obscure the full extent of their business dealings.

New Zealand was on a parallel track. In 2016, the Ministry of Business, Innovation and Employment (MBIE) concluded director IDs were a good idea for similar reasons, and consulted with the public in May 2017.

That followed a 2016 commitment New Zealand made at a global anti-corruption summit in London.

But in August of 2017, Labour swept to power, and while Australia ploughed on with its reforms, New Zealand’s stalled.

In December 2021, Cabinet agreed to move on laws that would require companies and limited partnerships to provide information on their beneficial owners were.

Unique director ID numbers would be introduced as part of the reforms, Clark said in March, acknowledging the safety fears of some directors, and promising they could use service addresses after the director ID numbers were introduced.

“I know that many directors have expressed concern about their home address being visible to all,” he said.

The IoD’s best estimate now was for the new laws to be in place in the next 18 to 24 months, Patterson said.

She hoped the draft laws would be introduced the Parliament before the general election in October.

The issue of directors’ right not to be harassed at home made headlines in 2018 when Lyttleton Port workers launched a leafleting campaign in directors’ neighbourhoods.

That same year, Stuff revealed British American Tobacco directors were illegally withholding their home addresses over safety fears.

”In the meantime we are still hearing of directors receiving mail, or visitors to their homes,” Patterson said.

She said the Auckland businesswoman was not the only director she had heard of who felt forced into breaking the law for their own safety.