NZSA Policy No 14 – Board Tenure 

NZSA Policy No 14 – Board Tenure 

Application:  This policy applies to all NZX listed companies. 

Purpose: NZSA maintains a range of policies to moderate the behaviour of all participants in the NZX listed company sector. These policies should be read in the context of the NZSA Policy Framework Statement. 

 

1.0  Board Tenure 

1.1 When a Director has served 3 by 3-year terms, a total of 9 years, we would expect that Director and the Board to have a discussion around their continued tenure. This should reflect on the skills the Director brings to the Board table in relation to the skills the Board has determined to be appropriate for the business. It should also reflect on the institutional knowledge of the Director and the need to retain this knowledge.  

1.2 If the Director and the Board believe the Director should seek a further term we would expect to see the discussions reflected in the Notice of Meeting.   

1.3 Our decision whether to support a further term will be based on the information provided and predicated on the principle of ensuring optimum Board performance. 

 

2.0  Commentary 

2.1 The mix of people on a Board and their skills sets are a significant determinant of the success or failure of a company.  Just as a company changes and evolves over time, the members and skill sets around the board table need to match these changes.  

2.2 The Board should be continually reviewing its currency through the Board Performance Evaluation process. Whilst the NZX Listing Rules require a Director to stand for re-election at least every 3 years, and do not place any restriction on the number of terms a member can serve, Board membership should not be considered to be open ended. 

 

Definitions 

The definition of Independence is given in the NZX Listing rules under 2.13.3 (f). 

 

Related Policies 

NZSA maintains other related policies regarding audit as shown below:  

Policy 2 Auditor Rotation (hyperlinks) 

Policy 3 Auditor Tenure (hyperlinks) 

 

Document Control 

This document was approved by the NZSA Board: July 2018 

This document is effective from: July 2018 

The next planned review date is: July 2021