NZSA Policy No 17 – Board Composition 

NZSA Policy No 17 – Board Composition 

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 Composition 

1.1 The composition of a Board is perhaps the most significant factor in the success or failure of a company. Getting the right people is one of the most difficult tasks a Nominations Committee faces. 

1.2 The Association believes that some of the critical factors that make up a successful Board are as follows; 

  • There is a collegial culture around the Board table. A dysfunctional Board will have difficulties making sound decisions. 
  • The skill sets around the Board table are appropriate. Boards should aspire to have one third of their number with relevant industry or business experience and if possible, this should be relatively recent experience. This is to ensure the Board can ask pertinent questions of the CEO and senior management to ensure the operations of the business are optimised and sound proposals are being bought to the Board.  A Board that lacks the ability to be able to internally verify the information it is receiving from its CEO and senior management may well be at risk. 
  • The balance of the Boards skill sets should be in appropriate disciplines such as finance, audit and accounting, legal, sales and marketing, IT and digital etc. 
  • The Board should have the appropriate degree of diversity. The Association defines diversity as including but not limited to; gender, age, ethnicity and most importantly thought. 
  • All Board members should possess a sound understanding of governance principles, be able to read and understand financial statements and be aware of the legislation and regulation that governs Directors and companies. 

 

2.0  Commentary 

  

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