Under the Companies Act 1993, aboard is the collective body of directors responsible for managing or supervising a company’s affairs.
Section 128 states that ‘the business and affairs of a company must be managed by, or under the direction or supervision of, the board of the company’. Even if there is only one director, that person legally is the board.
In practice, the board sets direction, oversees performance, manages risk, and holds management accountable. It’s about governance, not operations. In many small and medium businesses, the board may include owners and directors who meet regularly to review progress and make key decisions. Some also have an advisory board, adding external insight and discipline without the legal duties of formal directors.
Think of a Charter as the play book for how the Chair, CEO, and board operate. Without it, decision-making can feel like playing sport without rules. Everyone may mean well, but clarity, authority, and accountability soon become blurred. Especially as the team grows.
A Board Charter sets out how the board functions: its purpose, structure, and the roles of directors and management. It provides a framework so everyone knows who is responsible for what, and how decisions are made.
- Define the role of the board, governing, not running the business.
- Clarify who decides (board) and who implements (management).
- Set meeting structure and decision-making processes.
- Establish standards and conflict-of-interest expectations.
- Provide a reference point for new members and advisors.
It builds rhythm, strengthens decisions, and prevents boundaries from blurring.
- Constitution – sets the company’s legal framework.
- Shareholders’ Agreement – outlines ownership expectations and dispute processes.
- Board Charter – guides how the board operates day-to-day.
Together, these form your governance toolkit, legal, contractual, and practical.
A Charter helps high performing SMB businesses move from owner control to governance discipline. It brings:
- Clarity – clear roles and expectations.
- Continuity – structure that endures leadership changes.
- Confidence – assurance decisions serve long-term goals.
A Board Charter isn’t paperwork, it’s a commitment to good governance. It provides structure, builds confidence, and keeps your business focused on sustainable success.
For more info go to www.planaconsulting.co.nz or contact Hutch to discuss on 021 748 142 or john@planaconsulting.co.nz
