EDITOR’S LETTER : Steering Towards Value

Life for many directors is an endless balancing act. Not only must they assess the many and varied strategic decisions of their enterprise, guiding the ship into the best possible waters for its build, weight, draught and purpose. They must also keep weather eye out to changing influences on their role at the helm. For the nature of corporate governance is not fixed in stone. Nor, except in the broadest terms, can everyone agree on exactly what corporate governance adds, or can reasonably be expected to add, to the greater corporate good.
So in this issue of The Director we have pulled together series of articles examining the contributions of corporate governance, questioning its direct impact, challenging commonly held assumptions on how roles intersect and suggesting some alternative viewpoints.
It started with conversation with Sheffield director and partner Ian Taylor and reward team leader Sherry Maier in their Auckland office over the recent spate of governance breakdowns in New Zealand: many of them high-profile affairs that were much mulled over in the daily media.
The conversation led to us commissioning writer Graeme Hunt to go out and ask the questions. What’s triggering these breakdowns? Is there an underlying pattern? What should directors reasonably be expected to deliver? Where’s the Securities Commission when it’s needed? Or are the confines of governance stumbling block to the Kiwi entrepreneurial spirit? His research produced this month’s cover story “Protection, palliative or placebo”.
In other articles, Auckland University’s Ljiljana Erakovic unravels the dual roles of monitoring and mentoring when it comes to board/management relationships; Westpac chairman Peter Wilson talks about the differences between serving on Australian and New Zealand boards; and Massey University’s Dr James Lockhart examines to what extent board committees can be constructive or debilitating.
In yet another article, writer Simon Hendery asks Kiwibank’s successful chair/CEO duo Jim Bolger and Sam Knowles what makes their working relationship tick. Then in “A matter of faith” we’ve spoken with the chairs of two Christian not-for-profit organisations on the particular challenges their sector must face and how they resolve them.
Right at the end of this issue there are two thought-provoking reviews of books that view the world of corporate governance through very different sets of eyes. Gatekeepers: The professions and corporate governance examines the influence that auditors, corporate attorneys, securities analysts and rating agencies can bring to bear on directors. And new book by Merritt Fox and Michael Heller plays out the corporate governance lessons that can be drawn from transition economy reforms.
At the very least, this issue should help fine tune some steering decisions.