Business sector organisations

Descriptions of different types of business sector organisations, including board member requirements.

Publicly-listed companies
– Extra-large publicly-listed companies
– Large publicly-listed companies
Privately-held companies
– Extra-large privately-held companies
– Large privately-held companies
Co-operatives
– Extra-large co-operatives
– Large co-operatives
Medium enterprises
Family farms
Small enterprises

Publicly-listed companies

Publicly-listed companies are those whose shares can be bought and sold by anyone and are required by law to publish their financial positions

Extra-large publicly-listed companies

Staff size: very large (between 350 and 500 FTEs)
Annual turnover: very high (between $500 million and $1 billion)
Level of impact: national and/or international
Board size: medium with between 7 and 10 members
Sectors: extra-large-sized publicly-listed companies in New Zealand operate in multiple sectors, including telecommunications, media, transportation, construction, energy-generation and investment
Board members need:

extensive experience as a director (e.g. four or more director- / chairperson-of-board positions previously served)
top-level executive experience in law, banking, marketing or sales
proven experience in overseeing major corporate transactions
(usually) advanced education in management, law, accountancy or finance

Example: Telecom, Fisher & Paykel Appliances
Our advice: A relevant high-level commercial background is essential and previous governance experience is highly desirable. Reputation and personal networks are very important. Make your interest known to recruitment specialists who make recommendations for board appointments, and also to other board directors. The indirect approach to pursuing roles is most appropriate here.

Large publicly-listed companies

Staff size: large (between 150 and 350 FTEs)
Annual turnover: high (between $100 million and $500 million)
Level of impact: national and/or international
Board size: medium with between 5 and 8 members. Board members are usually well-paid
Sectors: large-sized publicly-listed companies in New Zealand generally operate in a wide range of sectors, from natural resources, windpower generation, insurance, tourism, news and media to homeware.
Board members need:

qualifications (usually multiple and/or post-graduate) and expertise in law, finance and/or accountancy
to have owned and successfully directed their own company
an extensive range of experience as senior executives in large companies and in multiple other chairperson and/or directorship roles, with New Zealand markets and overseas operations
to have had specific responsibility for overseeing major corporate activity such as takeovers, or representing business interests in major international forums

Example: Pumpkin Patch Ltd, Freightways Ltd
Our advice: A relevant high-level commercial background is essential and previous governance experience is highly desirable. Reputation and personal networks are very important. Make your interest known to recruitment specialists who make recommendations for board appointments, and also to other board directors. The indirect approach to pursuing roles is most appropriate here.

Privately-held companies

Private companies aren't required to publish financial information; their shares are held by fewer individuals and cannot be traded.

Extra-large privately-held companies

Staff size: very large (between 350 and 500 FTEs or larger)
Annual turnover: very high (between $500 million and $1 billion)
Level of impact: national and/or international
Board size: Boards are generally smaller than organisations of comparable scope of operation.
Sectors: Extra-large privately-held companies in New Zealand operate in a range of sectors, from banking, to food and clothing retail, to finance
Board members need:

extensive experience with management and governance of large business organisations
(often) prior affiliation with the founding family / company

Example: Todd Corporation
Our advice: A relevant high-level commercial background is essential and previous governance experience is highly desirable. Reputation and personal networks are very important. Make your interest known to the family/company concerned, to recruitment specialists who make recommendations for board appointments, and also to other board directors. The indirect approach to pursuing roles is most appropriate here.

Large privately-held companies

Staff size: large (between 150 and 350 FTEs or larger)
Annual turnover: high (between $100 million and $500 million)
Level of impact: national and/or international
Board size: medium with between 5 and 8 members.
Sectors: large-sized privately-held companies in New Zealand operate in a wide range of sectors, from banking, to food and clothing retail, to finance
Board members need:

previous experience at high level in the particular industry and (usually) with the area of operation
to have made a demonstrable impact in high-level company operations
to maintain a strong relationship with existing executive management

Example: Farmers
Our advice: A relevant high-level commercial background is essential and previous governance experience is highly desirable. Reputation and personal networks are very important. Make your interest known to the family/company concerned, to recruitment specialists who make recommendations for board appointments, and also to other board directors. The indirect approach to pursuing roles is most appropriate here.

Co-operatives

A cooperative’s board members function as intermediaries between the members / users of the co-operative and executive management, with responsibility to ensure that users’ needs are being met, rather than simply targets for profit are being achieved. Partly as a result of this, boards tend to be larger than other comparable organisations.

Extra-large co-operatives

Staff size: very large (between 350 and 500 FTEs)
Annual turnover: very high (between $500 million and $1 billion)
Level of impact: national and/or international
Board size: around 12 members. All directors are nominated and elected to the board by shareholders; candidates are nominated from among shareholders. Remuneration is usually in the form of an annual payment.
Sectors: extra-large co-operatives in New Zealand generally operate within the natural resource sector
Board members need:

experience in high-level management and governance of a range of large and extra-large organisations
experience as an academic, operational expert in finance or business, or a managing practitioner, across at least ten years
for agricultural cooperatives, extensive operational responsibility managing farmland or other productive land

Example: Fonterra
Our advice: Board members of co-operatives are elected by the shareholders, so a direct approach to pursuing roles is required. You will need to be a shareholder of the co-operative concerned.

Large co-operatives

Staff size: large (between 150 and 350 FTEs or larger)
Annual turnover: high (between $100 million and $500 million)
Level of impact: national and/or international
Board size: between 8 and 10 members. All directors are nominated and elected to the board by shareholders; candidates are nominated from among shareholders. Remuneration is usually in the form of an annual payment.
Sectors: large co-operatives operate in a broader range of sectors than extra-large co-operatives
Board members need:

extensive experience with management and governance of large organisation
to be producers (or even store owners) within the co-operative
to have broad market awareness and experience at national level
an understanding of many aspects of the governance of large cooperatives, including situations of members at national level

Example: Foodstuffs Co-operative Society
Our advice: Board members of co-operatives are elected by the shareholders, so a direct approach to pursuing roles is required. You will need to be a shareholder of the co-operative concerned.

Medium enterprises

Board positions for medium-sized enterprises are held by the founder/s of the company, with remaining positions filled by people with key experience and business connections in the market niche.

Staff size: medium (between 10 and 150 FTEs )
Annual turnover: medium (between $10 million and $100 million)
Level of impact: regional
Board size: between 5 and 8 members.
Sectors: medium enterprises operate in a very wide range of sectors, including retail, food and business
Board members need:

experience in the management of small- and medium-sized businesses
knowledge and experience of the company’s target market

Example: Minx Shoes, Trelise Cooper
Our advice: You are most likely to appointed as a director through either a personal association or a professional association with the company concerned. You could increase your professional associations by providing a relevant professional service e.g. acting as the accountant for companies, or becoming a business mentor.

Family farms

Boards of family farms tend to be very informal; particularly for large family farm holdings, responsibility for managing the farm is passed down through generations. Family farms are almost always managed and governed down through the patriarchal line.

Governance of family farms occurs through family meetings, with the assistance of a set of ‘advisors’, including lawyers, accountants, investment or insurance brokers, farm management consultants and financial planners. Accountants were the profession most favoured to act as advisors.

Staff size: small to medium (between 5 and 50 FTEs)
Annual turnover: low to medium (between $1 million and $50 million)
Level of impact: local
Board size: between 3 and 5 members.
Sectors: family farms operate in the farming sector (e.g. dairy, forestry, meat, wool, arable)
Board members need:

usually to be connected to the family owning the farmland
(advisors need) qualifications and experience in accountancy, law and/or banking
(advisors need) knowledge of marketing farm commodities, particularly of how to increase the value of produce

Example: Glenroy Farm
Our advice: You are most likely to appointed as a director through a personal association or a professional association with the company concerned. You could increase your professional associations by providing a relevant professional service e.g. acting as the accountant for companies, or becoming a business mentor.

Small enterprises

Small-sized enterprises in New Zealand are characterised as those with fewer than five staff members, making up 89.1% of all enterprises in New Zealand. The structure and operations of small businesses are generally informal and dynamic, planned on an ad hoc basis, with decisions made by key management staff and assisted by particular advisors often substituting for decisions of a stand-alone governance entity.

Decisions are made on a consensual basis among this group rather than through formal procedures. The most useful sources of governance-type advice are accountants, banks, seminars, short courses, family members and lawyers.

Staff size: small (between 5 and 15 FTEs or fewer)
Annual turnover: low ($1 million or less)
Level of impact: community
Board size: N/A
Sectors: small enterprises operate in a very wide range of sectors
Board members need: N/A
Example: Bodyscape Day Spa, Fine Touch Catering
Our advice: You are most likely to appointed as a director through a personal association or a professional association with the company concerned. You could increase your professional associations by providing a relevant professional service e.g. acting as the accountant for companies, or becoming a business mentor.

 Last updated 22 December 2010