Do board processes influence director and board performance? Statutory and performance implications

Based on British legislation, the duties of directors are stated in the New Zealand Companies Act 1993. However, "good" governance is not defined within the Act. Considering the relative importance attached by boards to a variety of governance tasks, this paper evaluates directors' perceptions of the current contribution of fellow board members to different aspects of governance practice. This evaluation is discussed in relation to the influence of board tasks and functions on actions that may be regarded as being in the interests of the company as defined by the Act. The evaluation illustrates the strategic orientation of the board, highlighting the extent to which individual directors and the board as a whole can actually influence key outcomes and, thereby, their governance contribution. The paper reports responses to findings based on a study involving 3000 directors and presents suggestions for enhancing board processes as well as possible changes in expectations that could be encapsulated in legislation.