To those of us affected by the global recession that started in late 2007 (and it is hard to think of anyone in the world who is not touched by this massive downturn), it is sobering to realise that much of what has been wrought upon us is the result of decisions made behind closed doors by corporate directors, regulators and politicians. Boardroom, regulatory and political behaviours are all grounded in the desires, emotions and knowledge of the human beings who aspire to be business leaders, regulatory watchdogs and politicians.

Clive had the privilege of speaking with Kerry in late March 2010. They covered a number of governance issues, and here are Kerry's thoughts.

From a New Zealand perspective, but also with an eye on the US and UK, and to a lesser extent Australia, for me the overriding issue is that boards and Directors are not providing consistently strong leadership that adds value to businesses.

Underneath that I think that there are three specific issues. Firstly, there is a real shortage of directors with a strong business background. These are the sort of people who have been senior executives or chief executives. They understand strategy and leadership in the broadest sense of the word, and they can lead people and organizations. They have been well trained to make decisions and understand how business decisions are made. Critically, they know about sustained business improvement and creating high performance companies – how to lead people and to use systems to increase productivity. So, if you are trying to recruit directors now in New Zealand, there is a very limited pool of people who have that real depth of business background. There are a lot of people who want to be directors and who are trained in accounting, law and other professions, but there is an increasing shortage of people with the real depth of business experience that is required.

We highlight how directors and senior managers perceive the roles of a board to involve overseeing risk and compliance, strategy, governance, developing the CEO and senior management and managing stakeholders. We find that managers and directors perceive board effectiveness as linked to different combinations of these roles and that there appear to be differences in perceptions between different types of firms. We conclude that clarity around the board's role set is critical to furthering the corporate governance research agenda, and that the relationship between board roles and perceived board effectiveness differs between managers and directors.

The influence of corporate governance on a firm's performance has recently been studied in industrial enterprises in developed countries, but not in services such as banks with a dual board system in Asia's newly-industrialized economies (NIEs). This research examines the effects of board structure and ownership on a bank's performance using a sample of 41 commercial banks in an Asian NIE (Taiwan). Results showed that board size, numbers of outside directors, and family-owned shares are positively associated with bank performance, whereas the number of supervisory directors has a negative influence on performance. The findings provide empirical support for corporate governance, which improves the performance of banks with a dual board system in Taiwan.

Regulatory reforms and changing community expectations about organizational behaviour have increased the emphasis on the role of culture in organizational compliance. This conceptual paper proposes a framework that captures the complexities of the relationship between compliance and culture by drawing from two theories relevant to organizational culture: Neo-Institutional Theory and the Competing Values Model. By integrating elements of these theories, three core dimensions of compliance culture are identified: legitimacy, permeability and control. These core dimensions provide for a pluralist approach to theorising around compliance culture. In addition to its theoretical contribution, the paper concludes that there may be practical utility in linking organizational compliance outcomes with performance on the three core dimensions. It is also suggested that compliance culture profiles using these dimensions may be used to predict how organisations might need to respond to regulatory reforms.

This article presents both theoretical and empirical support for moving from a traditional governance research paradigm towards a more holistic research approach. This includes taking into account behavioural, contingency and evolutionary theories, in an effort to better understand governance processes and effective board behaviour. Specifically, the authors highlight the importance of three groups of relationships (board dynamics, board–management relationships and board–stakeholder relationships) as contributing to good governance practice. Whilst historically researchers have largely ignored the behavioural aspects of corporate governance, the authors have made an attempt to open the ‘black box’ of governance processes and practices, and illustrate with examples from three New Zealand companies how the development of these relationships are important for effective board functioning.

In the wake of recent financial scandals and in the context of the global financial crisis, corporate governance is especially significant. We examine the effect of corporate governance practices on the performance of 106 mid-sized firms in India, between 2005 and 2007. Our results confirm a significant relationship between CEO duality and firm performance. We also find that a small board is more effective and enhances the value of the firm. However, in the Indian context, we find that non-executive independent directors are failing in their monitoring role.

The interplay of the board of directors (BOD) and the chief executive officer (CEO) in strategy-making has been the subject of some debate in the literature. Some experts argue the BOD should take a strong role in strategy-making while the alternative point of view is that the CEO is the key man or woman. In a qualitative study with 16 interviews of leading Australian industry figures, the CEO is found to be the key player in modern strategy-making. The findings identify how the BOD, individual directors and the CEO can combine to add value to the organization, in particular how these organization members can team up and interact to achieve a faster, more flexible strategy cycle. The modern organization focus needs to be on giving more emphasis to the empowerment, interaction and creativity of the CEO and top management team. The BOD should focus on questioning, criticizing, refining and enabling the strategy proposed by the professional managers. However, the study indicates these findings are subject to exception and variation in relation to factors including specialist knowledge, track record of performance, personality attributes, personal power, and political and influencing skills. The major focus of attention of the BOD and CEO is the strategic-thinking related activities in strategy-making. Strategic planning still has an important role in formalizing strategy content, usually in a regular cycle.

We present an empirical study on the community of management consultants in the specialty of corporate governance. Although most studies on consulting are done on large multinational consulting firms, we suggest an alternative framework that encompasses the heterogeneity of the industry, considering also the smaller consulting firm and the independent consultant. We have qualitatively studied the practice of consultants specialized in corporate governance and looked for evidence of community belonging. Drawing on a Kuhnian theoretical framework and adapting his notion of knowledge creation to a governance consulting scenario, we explore community belonging, entry and exit mechanisms into the consulting community of governance, common culture and language, and regulation of the community. Findings confirm that consultants have mixed professional identities and an overlapping of memberships of various communities. Our results show that although no formal regulation or organization regulates corporate governance consulting, mechanisms such as reputation, career paths, experience and credibility work in strengthening the practice of the community.

The governance and effectiveness of the healthcare sector is paramount due to its impact on human well-being and the size of this sector of the economy. Astute governments and healthcare boards need to know how to improve the governance of the sector. Therefore, this review draws together the theoretical and empirical literature from both the corporate and healthcare governance literature to determine the state of knowledge that can confidently guide those who either perform board roles as directors or who create governance structures. It concludes by suggesting that further theoretical work and research are necessary, and that the focus of both needs to be broader to take into account the complexity of the sector.