The research in this study, as stated in the introduction (Chapter 1), is specific to New Zealand and its publicly listed companies. The aim of this research is to study the power and influences on the board’s agenda to see who determines what corporate directors discuss. In examining the working of the corporate board it focuses on the first of the board’s decision making processes - governance agenda setting - to clarify who, through their power and influence on that agenda, controls the parameters of director discussions (what directors talk about); who drives the agenda programme - directors, management or other forces unseen - and how those with power and influence determine what issues directors include or exclude in their forums. Specifically it looks at this through agenda content, process, review and influence.
The process has been examined through direct research into the views, experiences, and actions of New Zealand resident directors of publicly listed companies to highlight who sets the rules, exerts influence (or even controls) the process they adopt or accept in setting the corporate board agenda. The subject of the research is, therefore, those actors who can potentially influence the shape and content of the board agenda. In doing so they have power over the direction and affairs of the publicly listed corporate board by deciding what that board talks about in its various meeting forums (that is, full board, informal gathering or board committee). The research seeks to determine if the directors control their board agendas (and thus the governance functions) or if the agenda is impacted upon by other people and powers within or outside the corporate who influence or dictate to the directors what to think about, therefore shaping the space for debate.
The research examines agenda content, agenda process and agenda review, as well as the primary subject of agenda power and influence (as outlined in Chapter 2). In the section on agenda content the questionnaire elicits the individual director’s views on agenda issues, the organisation of those issues in sequence, the perception of their importance, the director’s wish to add, change or delete issues, the presentation of the issues, agenda size and content of key importance - in broad headings of compliance, performance and strategic - and whether or not all the issues required by the director are covered. This section also asks if the agenda coverage gives the director
confidence in overall management and assists individuals to add value to the organisation.
In the section on agenda process the questionnaire seeks information on how the director puts up an item for discussion, the time available to consider the agenda before a meeting, whether there is enough time for open discussion provided by the agenda and if the board prepares and works to an annual plan. It also seeks information on agenda flexibility, whether executives present personally to the board and if the directors, as a board, discuss the role they play.
In the next questionnaire section, agenda review, information is sought on whether the agenda has changed in content focus, when and how the agenda process is reviewed and if (and how) the director believes the agenda process could be improved.
The fourth section of the questionnaire looks at known influence on agenda preparation (including the role of the chair and chief executive), the presentation and order of items for discussion, the sponsors of agenda items, adherence to the agenda format, who (or what class of people) can impose change on the agenda and whether the individual director considers the board has full agenda control.
The first three sections are designed to draw out process issues, problems or director concerns with the agenda. The fourth section seeks to identify the forces of power and influence on the agenda, examining primary points of control, in particular, the chair and the chief executive.
The final section, section five, provides statistical data for analysis, for example, responses to director category (to confirm the original research category allocation), industry sector, corporate revenues, and individual director shareholding.
With all responses to hand the questionnaire was analysed on SPSS. Analysis was conducted on total responses to each question and then each question was examined further as to response by differing director category, that is, by chair, executive director and non-executive director. The results obtained are graphed and displayed numerically. The survey results were then discussed in each of three separate focus
group sessions, and those sessions were recorded.
Firstly, in the total field surveyed of 450 directors there was a relatively small response (7%) from those who serve on the boards of publicly listed companies with a turnover of more than $1billion. That was anticipated as the total corporate field of companies in that category is relatively small in New Zealand (approximately 20). Of that total group, measured on turnover, there are those that are not publicly listed but are co-operatives, for example, our largest company Fonterra, our largest food retailer Foodstuffs, and meat company Alliance Group. The field in the publicly listed category in the $1billion plus turnover is, therefore, very limited and the results produced here may vary from a similar survey conducted in a larger offshore environment. That lack of scale suggests caution in cross-border comparisons. Secondly, the number of chairmen surveyed from these large corporates is likewise small and their situation may differ from their counterparts who are chairmen/presidents of, say, a large United States publicly listed corporate. The chairmen surveyed here were without exception non-executive, a quite different picture to that encountered in the United States and commented on in Chapter Two.
The full results of the questionnaire (with both quantitative and qualitative information) are set out below in numeric order exactly as the questions appeared in the questionnaire (with figures and tables where appropriate). The total responses to each question are shown and where these are less than the total field this indicates a no response or omission by a respondent or respondents. In those cases the total responses are stated as less than 103.
While the overall response is important, comparison by sub-group is particularly relevant when considering issues of influence and agenda control, as will be discussed in the following chapter (Chapter 5). The maximum total response of 103 included 24 chairs, 10 managing directors (executive directors or ED) and 69 non-executive directors (NED) as shown below in Figure 4.1 (and as outlined in research methodology in Chapter 3).
Figure 4.1. Sub groups of total survey respondents
With total responses of 103, one response (count) equates approximately 1% of the total field of all respondents who participated. As stated in Chapter Three, Research Methodology, the total of responses to the questionnaire represented approximately 23% of the population of publicly listed company directors in New Zealand as identified in that role and resident in the country at the time of the survey. Responses on each group show either yes or no to specified values or use a Likert scale of 1-5 rounded to the nearest whole number. These are combined to show total positive, negative or neutral responses expressed as percentages.
Relevant focus group points that address the respondents’ answers to individual questions are added at the end of each question where that provides useful insight and a director view of actual practice. Those points are included as simple key statements and the information is further expanded in the following chapter, Discussion.
The responses presented in this chapter consist mainly of simple frequency and cross- tabulated data. Results at this descriptive level are necessary in this thesis, given that both in New Zealand and internationally, little has so far been discovered on the topic and descriptive level data is necessary to provide some answers to the most fundamental questions about these agenda issues. The results that follow are presented as a total and in separate modes of chair, executive director and non-executive
67% 23%
10%
Non Executive Directors
Executive Directors N = 10
director. (Note that responses to the questions do not necessarily add up to 100% due to rounding errors.)