Knock knock? How best to address a director’s right to privacy

Last week, the Companies (Address Information) Amendment Bill was introduced to Parliament. It aims to address some of the privacy and protection concerns associated with the publication of a director’s residential addresses on the Companies Office website.

The Bill, introduced by Labour’s Deborah Russell, would allow a director to substitute an address for service for their residential address, subject to meeting certain criteria. As drafted, directors will be able to substitute their residential address for an address for service if they:

• sign a statutory declaration that the publication of their residential address is likely to result in physical or mental harm to either themselves or another resident at the address
• make an application to the Registrar of Companies, including a copy of the statutory declaration.

The Bill is a good starting point for addressing directors’ privacy and protection concerns; however, we do not consider that the proposal goes far enough. We live in an environment where directors are legitimately concerned about protecting their private information, and they have been expressing their concerns around the current publication requirements for a number of years.

The issue was highlighted last year following a high-profile incident in Auckland, where a director who was being stalked and harassed was only able to have their address removed from the Companies Office once they had obtained a permanent protection order against the perpetrator.

We have also observed a number of large foreign companies being hesitant to conduct business in New Zealand due to the requirement to publish directors’ physical residential addresses.

A staunch opponent of the current publication requirement is new ACT MP Laura Trask, who announced she was submitting a Member’s Bill to completely remove the publication of a director’s address requirement altogether. This Bill was originally submitted in 2021 by ACT’s Brooke Van Velden, however it was later withdrawn following her appointment as a minister.

The key difference between Trask and Russell’s Bills, is that under the former, a director is still required to provide their residential addresses to the Registrar of Companies, but the director would need to opt-in to publication of their address. Trask’s Bill does not contemplate any prerequisite to be met for directors’ address details to be removed.

In terms of other jurisdictions:

• Australia is in the process of moving away from directors having to disclose their addresses, following the introduction of Director Identifier Numbers (DINs) in 2021. A DIN is a 15-digit number given to every director of an Australian company, which will eventually provide the ability to determine which boards an individual director sits on, without peering into their private address details.
• In the United Kingdom, a director’s residential address is automatically considered ‘protected information’, which the Registrar is prohibited from disclosing to the public.

While the proposal to use an address for service may resolve immediate privacy concerns for directors, it does not deliver the same benefits that we consider a unique identifier would. For example, if multiple John Does used the same address for service, it would be difficult for someone to be sure they have identified the correct John Doe. For this reason and given our close ties with Australia, in our view adopting a unique identifier approach is preferable.

Expanding the thinking, we query whether the same approach should be taken regarding publication of private shareholder information. While not accountable for companies’ decisions in the same way as directors (and therefore not subject to possible targeting), in some contexts, shareholders may consider that they deserve the same level of privacy protection as directors. A unique identifier approach would provide that same protection.

This Bill is yet to reach its first reading stage, but is worth keeping an eye on for how it progresses through the house and the Select Committee.

We would like to acknowledge Dentons Solicitor Caleb Turnbull for his support in drafting this article.