HOW THE CONCEPT WAS SHAPED

General surveys, such as those from global consulting group McKinsey (Felton, 2004), suggest that directors recognise the agenda as an area where there is dissatisfaction to be addressed (see Chapter 2). The difficulty with such general surveys is the lack of clear definition of the actual concerns and the lack of a disciplined follow-up in reviewing those concerns to establish how real they may be. For example, asking: do you support or oppose more director control over the agenda? (as in the McKinsey survey quoted earlier) suggests other unspecified powers may have a controlling role in a function that many see as the domain of the board and its members. Yet that survey does not seek to define who are those controllers/influencers.

This research project was designed to clearly identify the nature of those concerns and to determine where agenda control really lies, with directors or with forces outside the board. It was also necessary to categorise the directors to consider their differing viewpoints, if any, by comparing the overall response to the individual category response from each chairs, executive directors and non-executive directors.

It became apparent early in planning the project that a qualitative focus on a small number of case studies with agenda and minutes content analysis supplemented by interviews with the chairs, directors, chief executives and visible agenda setters was too narrow a perspective for the initial concept of a theory building research project of this kind. Such a narrow approach might well fail to identify agenda power and influence. The research methodology was, therefore, designed to adopt a broader approach to a very specific and focussed subject with a clearly defined respondent group in New Zealand, that is, the directors of publicly listed companies.

Just studying power and influence on the agenda suggested a very narrow conceptual lens. It was, therefore, broadened so that any elements of power could also be seen in content inclusion/exclusion, in the process of preparing the agenda and in the review or critique of the agenda. The first three elements listed above were seen as being able to support/disprove or enhance commentary on the question of direct influence but were also considered likely to highlight indirect sources of influence or power, that is, the second or third faces of power.

There has been no attempt to survey state owned enterprises (SOEs) or other government organisations, trusts or entities which, in all, account for over 500 different governance boards that the Crown appoints to within New Zealand (CCMAU, 2009). Those people also have different objectives, often an Act of Parliament or statutory requirement, and their directors are selected in a different way to a publicly listed concern with the owner/shareholder, the government of the day, having control and the final sign-off on the appointment of all directors.

For all that, many of the people who participated in this survey also sit or have sat as chair or a director of a private company, an SOE or government body. This applied to at least half of the directors who formed the first focus group used in this process. Thus, while the results do not claim to be transferable to these other organisations they may not, in reality, prove too different.

In selecting the sample to survey the target was those directors whose residence was New Zealand and who were publicly listed company directors serving on New Zealand companies at the time (during the last two quarters of 2007). There are just over 1600 directors in publicly listed companies in New Zealand (NZX reported the number at 1633 in 2009). The difficulty with this number is that many of these people hold multiple directorships. That is clearly illustrated by the first focus group where the number of directorships held by the members of the group as individuals varied from three to 11. (One individual had, at one stage, held 15 directorships concurrently, several of these in publicly listed concerns.)4

4 _{The record for a New Zealand director must surely be Keith Smith who was reported as being on 97}

The complete director list, as compiled by a major executive search firm, was compared to a list of public company directors

supplied by Massey University (from previous research studies). Those from overseas (either by shareholder interest or company choice) or resident outside New Zealand were deliberately omitted. Where there was conflicting information or confusion names were confirmed or omitted. The total size of the potential population of directors to be surveyed under these criteria was 450. The response of 103, from a population of 450, provided the views of just over one fifth of all those directors (23%). An interesting feature of the research response was the number of calls from participants who hold several directorships asking if the researcher had a preference for the type of company they should consider in answering the questionnaire. Denscombe (1998) suggested it is not uncommon to get response rates as low as 15% while Sarantakos (1998) points out that a response rate of 75% is taken to be very good although some researchers are content with a rate of 10%. With busy directors the rate achieved was considered sound particularly as similar surveys carried out in New Zealand have shown much lower response rates.5 The present research response was considered sufficient to provide useful results. The responses are also sufficiently large to allow a useful breakdown into sub-categories of chairman, non-executive director and executive director and bring those into the calculations.

5 _{For example, Ingley and van der Walt (2005) surveyed 2500 members of the Institute of Directors for}

418 usable responses – approximately 17% of the potential field. At the same time they relied on a questionable “estimate” from the Institute that only 15% of the members (who they eliminated) were “not current directors”, they could not test the responses because of anonymity and the survey was assigned and conducted through the institute.