Understanding Governance

Boards and Committees

Most organisations are governed by a board of directors or committee, which directs the management team:

Board of directors - governs the organisation

Led by the chair

Ensures the organisation is well-run, financially sound, and compliant with relevant legislation, sets the strategic direction and hires the chief executive.

Management team - manages the organisation

Led by the chief executive

Responsible for the day to day running of the organisation.

Benefits

A governance role can give people valuable experience in their field of work, connect them with people who can help their careers, and lead to more senior or prestigious governance roles.

By taking on a governance role individuals are also making an important contribution to New Zealand society.

Core Requirements

Boards require their directors to have:

Personal qualities such as common sense, leadership, good judgement, integrity, courage, independence, energy and commitment
An understanding of the responsibilities involved, including legal obligations
Either specialist knowledge, experience in business or a profession, or extensive community knowledge and experience.

Different skills and experience are required for different boards

Use the following table as a guide to the skills and experience required for the different types of directorships:

Type of Board	Examples	Requirements
Commercial	State-Owned Enterprises such as Meridian Energy Crown Research Institutes such as the Institute of Environmental Science and Research Te Papa NZSO	High level experience in one or more of the following: law, finance, banking, administration, business, accountancy, or investment High level experience in governance in the public or private sector. In some cases specialised knowledge - e.g. arts management, dispute resolution, legal procedures, or product development
Quasi-judicial	Advertising Standards Complaints Board Human Rights Review Tribunal	A background in law and/or an understanding of regulatory procedures Experience with hearings or tribunals
Professional	Nurses' Council Electrical Workers' Registration Board	Current registration in the profession, e.g. registered electricians for the Electrical Workers’ Registration Board OR Some knowledge of the industry or profession Some experience in governance e.g. committees, voluntary organisations
Community	Community Trusts Conservation Boards Lotteries Distribution Committees	Some experience in governance e.g. committees, voluntary organisations, or professional bodies Good networks within the community The ability to manage large sums of money

General responsibilities

Boards require their directors to:

Have time to devote to the role - the Institute of Directors recommends two hours of preparation time for every one hour spent in a board meeting
Play an active role in meetings - contribute, ask questions, request more information, and challenge assumptions
Maintain the highest personal and professional standards
Understand the issues facing the organisation and the environment in which it works

Note: Some people become professional directors and maintain a portfolio of directorships. Others combine their full-time employment with one or two board appointments.

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