Boards of Directors and Board Committees in New Zealand: International Comparisons

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Vol: 10, Issue: 2

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Fox, Mark; Walker, Gordon
boards of directors; board committees; New Zealand; corporate governance
article description
[extract] Before 1995, little was known about boards of directors of New Zealand companies. This is not the case in 1998. We have build up a picture of boards that encapsulates several elements: board size (the number of directors on any given board), representation by outsiders (non-executive directors on boards) and board leadership (whether or not the board chair is also an executive director). We also know something about board committees in New Zealand. These matters are important because they indicate the ability of boards to fulfil their corporate governance functions. Boards of directors fulfil three interrelated governance functions: compliance (ensuring the fulfilment of legal requirements); directing (determining the overall direction of organisations), and, monitoring (overseeing management). Studies of boards of directors suggest that much of the work of boards is carried out in committees, especially in larger boards. In Part II of this article we discuss debates concerning board size, CEO duality, and, non-executive representation on boards and board committees. Part III then proceeds to compare this data with other jurisdictions. In Part IV some conclusions are drawn.