Chartered Accountants

Code of Ethics for TRUSTEES

The Code of Ethics for Trustees provides a set of standards to serve as a guide to the conduct of Trustees and trust administrators, a resource for Trustees beneficiaries and managers of trust assets and to assist in the promotion of public confidence in Trusteeship within New Zealand.

At Trustee should disclose any interest or relationship likely to affect impartiality of which may create an appearance of partiality or bias. The duty to disclose ongoing.

A person who is, in fact, biased or where encumbrances may give the impression of bias or partiality shall not accept appointment as a sole Trustee or majority position. An appointed Trustee must disclose the existence of any interests or relationships which are likely to affect impartiality or which might reasonably create the appearance of bias or interest in any party, contract or property with respect to which the appointment relates. Persons who are requested to accept appointment, as Trustee, or any other fiduciary capacity, shall therefore before accepting disclose:

1. Any direct or indirect financial or personal interest in the outcome of the appointment;

2. Any existing or past financial, business, professional, family of social relationship which are likely to affect impartiality of which might reasonably create an appearance of partiality or bias.

An appointed Trustee should uphold the integrity and fairness of the appointment.

Before accepting appointment a member shall review the Trust Deed together with all other documents setting out the terms and conditions, powers and responsibilities of the appointment. The Trustee should not accept an appointment without being able to provide the appropriate skills and time to execute the required functions in a prompt, efficient businesslike manner.

An appointed Trustee in communication with other appointees or interested parties should avoid impropriety or the appearance of impropriety.

When approached with a view to appointment, a member should make sufficient enquiries to be able to assess whether there may be any justifiable doubts regarding impartiality or independence, whether it is appropriate to take the particular appointment in terms of the prospective appointees competence and whether the time and attention required for the appointment can be given if the appointment is accepted. The prospective Trustee shall respond to enquiries regarding the above matters.

The duties of a Trustee should be conducted fairly, diligently and expeditiously in accordance with the terms of the Trust Deed.

A Trustee should conduct the affairs of the Trust in an even-handed manner, treat all parties with equality and fairness, be patient and courteous to all parties and to their representatives and so encourage similar conduct, always be mindful of and act strictly in accordance with the Trust Deed. A Trustee shall perform all duties diligently, prudently as promptly as possible in accordance with the Trust Deed, no Trustee shall be entitled to any benefit or remuneration, or to trade with the Trust, except as expressly permitted by the Trust Deed.

A Trustee should make decisions in a just, independent and deliberate manner.

A Trustee should after reviewing the terms of the Trust Deed and careful deliberation administer the trust assets and affairs by exercising independent judgement. A Trustee in reaching a decision cannot be influenced by pressure, fear of criticism, or any form of self interest.

A Trustee must be faithful to the terms of the Trust Deed, relationship of trust, and confidentiality inherent in that office.

A Trustee is a relationship of trust to the beneficiaries and should not at any time use confidential information acquired as Trustee to gain personal advantage or advantage for others or to affect adversely the interest of another.

A Trustee should have undertaken appropriate training and have appropriate experience, or access to appropriate advice, as to the duties of a Trustee.

It is the responsibility of a Trustee to engage in continuing education to ensure that the Trustee skills to be applied are both current and effective in respect to statutory requirements, diligence and prudence.

Advertising or promotion by a Trustee must be subject to professional standards.

Professional standards in relation to advertising and promotion require that information not be:

1. Inaccurate or likely to mislead

2. Likely to diminish public confidence in trusts or Trustees

3. Used to make comparisons of other Trustees

4. Indicative, or imply a willingness to accept an appointment except in accordance with this code

A Trustee should fully disclose and explain any basis of fees and charges to the parties.

Parties should be provided with sufficient information about fees prior to acceptance of appointment as Trustee so that the parties may determine whether or not they wish the appointment to proceed. The fees shall be reasonable considering among other things the type and complexity of the matter, the expertise of the Trustees and the time required. It is prudent practice to record the basis for the fee in writing with the parties. It is the responsibility of the Trustee to review the Trust Deed prior to accepting appointment as a Trustee and in particular, clauses relating to the payment of Trustees fees and expenses to ensure no conflict of interest.

A Trustee found to be in breach of this code shall be subject to the provisions of the Association by-laws dealing with ?Professional Conduct? and/or ?Disciplinary Matters?.

A breach of this Code of Ethics may result in the breach being considered by the Association?s Conduct Committee.

Source: NZ Trustees Assn

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