Who is doing the board’s thinking?

“If you’ve got a board of seven and a subcommittee of three or four, that’s half the board. Why don’t I have the whole board?” 

Rodney Wong ONZM, DistFInstD asks because he has seen committees become the place where difficult work happens while the rest of the board receives a recommendation without hearing the full argument behind it. 

“You can have two people with extreme views on a board and they’re moderated. Put two people on a subcommittee and they can dominate.” 

Wong brings more than 40 years’ experience across private and public organisations, including as a chief executive, co-owner of Yoplait New Zealand and professional director. His governance roles have spanned universities, iwi investment companies, airports, research organisations and social service agencies. 

He has watched committees become captive to a small group while the rest of the board relies on them to do the heavy lifting. 

“The rest of the board are lovely people. They rely on these individuals to do all the work and they don’t really ask the hard questions.” 

Finance, audit, risk and remuneration committees can examine detail that would otherwise consume the main board meeting. Wong’s concern is whether their work adds to the board’s judgement or gradually takes over a decision that belongs to it. 

“The purpose has to be very clearly defined and everything minimised so it doesn’t usurp the authority of the whole board.” 

Wong wants directors to feel able to attend committee meetings even when they are not formal members. 

“All board directors should know and should feel comfortable attending any subcommittee meeting.” 

On one board Wong chairs, the finance, audit and risk committee meets for an hour before the main board meeting. Every director attends. 

“We’re going to cover it off anyway. It’s far better that, rather than just receive a recommendation, they understand the full scope.” 

He applies the same expectations to committee processes as he does to the board itself. “The way you manage a board should be similar to the way you manage a subcommittee, and it tends not to be.” 

Committees need clear terms of reference, minutes, action points, recommendations and continuity. As membership changes, the reasoning behind earlier decisions can disappear. 

“Board members on those subcommittees will churn. They start losing institutional knowledge and spend half their time relitigating things that were decided by a previous subcommittee two or three years ago.” 

Wong would review committees in the same way a board reviews itself. Does the committee still have the right skills? Is it doing useful work? Are members there because they are the right people, or because they were willing to take the role? 

“Is there any point having four accountants on a finance, audit and risk committee when you’ve got other views on the board? The subcommittee should have abilities in that area, but it doesn’t have to be full of those people.” 

The whole board should decide who sits on the committee. Once it delegates work, the full board has to stand behind the recommendation that comes back. 

Wong has worked with Māori organisations where collective discussion is central to decision-making. Moving an issue into a smaller group can interrupt that discussion. 

“As soon as you start putting subcommittees into those organisations, it can break that cultural dialogue.” 

The structure can create distance between people who need to remain part of the conversation. 

“By putting up those walls, it can break down the open dialogue and cause conflict.” 

Different hapū, interests and relationships create different expectations about who should be involved and how decisions should be made. 

A committee may work in one setting. In another, a steering group or collective process may produce the same outcome without removing the discussion from the wider group. It comes down to the culture of the organisation, says Wong. 

Advisory boards serve a different purpose. Wong puts it succinctly: “An advisory board is all care, no responsibility. A committee is some responsibility, but not the final accountability.” 

He sees advisory boards working well for owner-operators. Founders, couples or business partners may want experienced advice while keeping the decisions in their own hands. 

“They like to run the business and make the decisions. They don’t like a board telling them what to do. 

“It can sit around and say, ‘Have you thought about this? I think you should do that. If you don’t do this, this will happen.’ But it is really up to them.” 

Trying to impose a formal board on an owner-operated business can frustrate both sides. The owners continue to make the decisions, while directors find themselves pushed to the side. 

“That is where I see the most benefit from an advisory board.” 

Wong also sees value when a board lacks balance or experience. Shareholder representatives may dominate or the board may need a view from outside its usual assumptions. 

His time on the Massey University Business School advisory board showed what that distance could offer. 

The advisory board included senior business leaders who could look beyond the university’s normal planning cycle. When Massey asked what would happen if student numbers fell by 20%, Wong and two other members prepared a mock profit and loss model. 

Their conclusion was that the question was too narrow. The university’s overhead structure mattered more than the number of domestic students. 

“From a business perspective, the overhead loading was so high that it didn’t matter how many students they had. Being outside the system, you can state the obvious.” 

That distance depends on appointing genuinely independent advisers. Wong is cautious about former directors, former chief executives or people closely involved in earlier decisions. 

“You don’t want people who have been part of the problem and still believe there isn’t a problem. Advisory has to be advisory. It has to be independent and it has to be forward-looking.”