The Institute of Directors has made a case for adding independent directors to the boards of farming company operations.

The institute, in launching "Farming Directorships" a due diligence guide, said it wanted to help independent directors understand the nature of the business before deciding whether to join a farming company board.

The guide, developed with DairyNZ, was launched by the institute's Waikato Branch at a function in Hamilton today.

The institute's chief executive Simon Arcus said the guide aimed to equip prospective directors and advisers in the rural sector with the "best knowledge" to enter the environment.

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"There is growing recognition of the important role that governance structures and long term thinking play in the creation and protection of shareholder value in farming businesses," he said in a statement.

"Good governance is about making the business meet its potential," he said. "It means having strategic plans for the future that anticipate the good and bad times ahead," he said.

The institute's Waikato Branch chair Margaret Devlin said the branch had been involved in supporting the development of the guide. "Bringing on an independent director can help grow the business for the long-term," Devlin said.