We study whether pension fund board governance relates to asset allocation. Pension funds with well-governed boards have greater international diversification, lower cash holdings, and, when pension funds are small, invest more in risky assets. In particular, pension fund boards that establish comprehensive investment policies invest more in equities, in foreign assets, and hold less cash. We argue that a comprehensive investment policy is likely to serve as a proxy for the financial expertise available to the fund while it provides the set up to facilitate decision making. Finally, we further show that the presence of external financial experts is also associated with lower cash holdings.

In a context of institutionalized regulation and academic framing determined by agency theory, we note paradoxes in board governance literature and practice. These paradoxes concern boards’ conflicting roles of monitoring/control, and innovation/strategy-making. We explore directors’ mind-sets about governance on which their resolution of paradoxes and their decisions and actions will be based. We do this by applying discourse analysis to the transcripts of 60 semistructured interviews conducted with New Zealand directors who described and evaluated their experience of board governance. We identify and discuss their various discourses, which we label discourses of conformance, of deliberation, of enterprise and of bounded innovation. We note the homogeneity of discourses across different organization types, the dominance of conformance, the nonresolution of paradoxes, and the likely effects in inhibiting board strategy-making and contribution to innovation. We recommend attention by boards to their mind-sets and processes, and the development of generativity.