PurposeThe purpose of this research paper is to explore the proposition that diversifying the board in terms of gender, ethnicity or skill base may require consideration of the specific strategic environment of the organisation. The proposition arises from the question as to whether or not greater diversity in board configuration is desirable in certain circumstances and considers the group dynamics, skill mix and capabilities that are required by boards under different conditions of change and strategic complexity.Design/methodology/approachThe study examines the financial performance of New Zealand publicly listed companies over a five‐year period and focuses on changes in board composition, strategic activity and implications for corporate performance.FindingsThe study finds limited support for the idea that board configuration, strategic context and corporate decision quality may be linked.Originality/valueThis paper will be of particular value to those involved in the appointment of directors within the private and public sectors. In particular, it focuses discussion on the strategic environment faced by the organisation and the relevance of a range of potential selection criteria when appointing new directors. It is also of interest to researchers evaluating the value of social capital and gender equity in contemporary organisations as, based on empirical reseach, it challenges conventional thinking. By implication, the paper also questions whether or not boards are actually able to influence key outcomes in the manner expected by legislators.

Based on British legislation, the duties of directors are stated in the New Zealand Companies Act 1993. However, "good" governance is not defined within the Act. Considering the relative importance attached by boards to a variety of governance tasks, this paper evaluates directors' perceptions of the current contribution of fellow board members to different aspects of governance practice. This evaluation is discussed in relation to the influence of board tasks and functions on actions that may be regarded as being in the interests of the company as defined by the Act. The evaluation illustrates the strategic orientation of the board, highlighting the extent to which individual directors and the board as a whole can actually influence key outcomes and, thereby, their governance contribution. The paper reports responses to findings based on a study involving 3000 directors and presents suggestions for enhancing board processes as well as possible changes in expectations that could be encapsulated in legislation. Copyright Blackwell Publishing Ltd 2005.

While the management literature is accepting of the value of a performance appraisal, there is disagreement in the governance literature as to the role, value and contribution of board appraisals to board effectiveness. This disagreement centres on the politics associated with the "horizontal" appraisal of colleagues implied by board assessment as opposed to the "vertical" appraisal implicit in management. Such disagreement is complicated by the degree of discomfort board members may feel when encountering the more subjective issues of interpersonal dynamics and process as opposed to the more objective measures of performance. However, subjective measures are frequently vital in determining board effectiveness. This paper proposes a conceptual model for the evaluation of boards. It then explores the implications of different approaches to the evaluation of board effectiveness by highlighting selected methodologies for the evaluation of board processes and procedures, individual directors, the chair and the chief executive. In this, the implications of different types of performance measure are considered in the context of the type of organisation, its purpose, reporting requirements, ethos and style of operation. A set of suggestions as to approaches to board evaluation is provided together with reactions of experienced directors to these ideas. Copyright Blackwell Publishers Ltd 2002.

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