Boards of Directors; Better, Stronger & Trusted…

Directors in high demand will be those who can prove, absolute; guardianship capabilities, Governance Code commitment, with strategic implications of competitive, economic, political, regulatory volatility, and investor aggression. 

Future Board’s will confront Uncertainty, Activism, Volatility and pressure like never before in the history of governance.

The acid test will be how compelling the Board’s strategic action case is to deliver sustainable growth and long-term stakeholder value.

The uncertainty encompasses economic growth, geopolitical issues, market fluctuation, impact & speed of technology take-up, and capital raising. To adequately address these challenges will require assessment driven refreshed Director capabilities, reliable commitment and close interaction with management & stakeholders.

The NZIoD “Future Focused Board” is a discussion paper that explores trends, challenges and opportunities.  But here’s the point, it repeats published international research works overlaid with a short and limited online survey of NZ Directors. The paper has a time to ask” section posed by NZ recognised Directors

The paper urges boards to allocate time to challenge and adjust processes, practices and procedures to improve board effectiveness; and is acknowledged for this.  But overall it is a quiescence approach.

It’s focus regrettably is general aspirational with overtones of the PM’s answer for everything.... “let’s have a discussion and form a working group”. This should not, is not, the way high performing successful Boards of Directors operate.

The opportunity existed for the NZIoD to breath a sense of dynamism back into a tired phlegmatic organisation. 

Global governance professional practices have advanced significantly faster than NZIoD resource capabilities & Management & Leadership competences! 

Instead the NZIoD member driven entity is bereft of action, purpose, strategic direction, and contemporary governance educational standards. The question is how long will NZIoD members have to wait until “Paper Discussion” concludes – “Let’s hope it is sooner than their stated & anticipated reaction and commentary regarding the Mainzeal Court decision and it’s ramifications & implications on NZ Boards of Director (still waiting)” …

The NZIoD is failing its mission, being the leader advocating International Standards for the Board and adopting urgently needed International aligned accredited qualifications and charter status.

The paper is a “talk-up” offering generalised observations, vague notions, lacks validation by NZ / Global research, diverse focus groups and extensive Director survey’s

The paper lacks Action & Orientation e.g. “We will do, what…by when...because”.

The record of NZ governance failures, investor, creditors bankruptcies, the consequence of naive cavalier egotistically driven Director lightweights has been an alarm siren resulting in Judicial criticism of NZ poor Governance standards. 

Many of these companies whose corpses litter the contracting infrastructural landscape were undermined by negligent, overoptimistic, risk averse and ill-informed boards. 

Questions that I & my Colleagues are asking included: -

1. Why does the paper only call for more discussion, “Time to Ask” etc and not recommended action priorities!
2. Will this paper “take the NZIoD to the higher level on its strategic journey driving excellence in corporate governance for directors that NZIoD heralds, If so how?
3. Will it inspire and equip people in governance to add value across New Zealand business and society? If so how?
4. Will it deliver a world class professional body at the heart of New Zealand’s governance network?”. If so how?
5. How will Alan Isaac, CFInstD, President of the NZIoD vision that the NZIoD chartered designation will be the ‘Gold Standard’ and that boards will be expected to have a certain percentage of Chartered Members be achieved?

Note: Alan’s Statement does not define “gold standard” nor “certain percentage” nor timing to achieve. As an example of a Board vision, it is not compelling. More importantly what is the NZIoD Board Strategic Direction? NZ still awaits the HOW, WHEN and WHY narrative. Harvard describes strategic direction narrative as -” As the story that inspires, excites, attracts and engages influencers. A story that is concise but comprehensive. Specific but with room to grow”.  

Mission relates to doing, which means it outlines the practical things NZIoD will do to achieve its vision. Vision & Mission statement is the road map about the difference the NZIoD Board wants to make!!!!  Consider the NZIoD approach with other published recent examples, with similar Governance terms of reference: -

1.   NZX 2019 Corporate Governance Code, sets out Governance Principles and importantly how they are expected to be applied. Note Discussion is not an option!

2.   The ASX Corporate Governance Council paper also sets out Principles and actions that address emerging Governance issues around culture, values and trust, fuelled by recent examples of conduct by some listed entities falling short of community standards and expectations. Note Discussion not an option!

The NZIoD Board would be better advised to broaden survey research parameters collaborate and redefine paper actions. This is important for the NZIoD IF THEY ARE SERIOUS ABOUT DEFINING A BLUEPRINT; NEW AERA FOR NZ BOARDS

I’m Doug Marsh. JP, Life Fellow NZIM, (Rtd) Fellow Inst. Directors, Chairman & Director, Inaugural President Business NZ and Hon.Consul. 

MY VISION: Boards leaders of exemplary Governance International Standards, underpinned by restored investor, creditor, public confidence

Email Me: marshgovernance@gmail.com