Who bosses the bosses? Directors, that's who. But who watches them? Investigations reporter Matt Nippert and data journalist Keith Ng dive into a decade of share price performance data to power-rank the men and women behind the corporate thrones.
Sam Knowles knew his numbers were good, but not quite how good. Rather, he didn't know how they compared with his peers.
"I knew that I could stand up and say 'I've created a lot of money for a lot of people'," he says from his home base in Wellington.
The founding chief executive of KiwiBank traded the C-suite for the boardroom in 2010, and has closely tracked the total shareholder returns of his board postings ever since. He even includes them on his CV, acknowledging almost sheepishly that he may be an quantitative outlier.
"I don't know if all directors do that. I've never actually seen it on anyone else's CV."
One reason why such self-measurement is rare is that Knowles, by some margin according to Herald analysis, is New Zealand's most successful professional company director.
After assessing boards of companies listed on national exchange NZX over the past decade by returns to shareholders, weighted for tenure length and underlying market trends, Knowles was the clear leader in the country's pool of 33 professional directors.
(Story continues beneath the graphic below.)
You can explore the rankings in our interactive data visualisation below. Each chart shows the shareholder returns (red line) compared with the middle 50% of NZX companies (shown in grey) when the director was on the board of that company.
Thanks largely to a stint chairing Xero during the accountancy software company's meteoric rise in the middle of the decade, companies Knowles directed achieved returns 37.4 percentage points above the NZX average.
Warning over 'tax refunds' appearing in Kiwi accounts
Now, as even Knowles himself acknowledges, luck in timing when seats are taken and relinquished plays a big part, and business performance is a function of far more than the actions of single, part-time, director.
But even club cricketers are better served with performance metrics than those in the serious business of corporate governance. The "Directors of the Decade" project is an attempt to kick-start a debate on corporate governance by bringing an admittedly crude batting average to the boardroom table.
(Interestingly and understandably, given even listed company directors are human, those spoken to by the Herald for this project were more likely to emphasise their own role in firms that had performed well, while poor results were often explained as down to factors beyond their control.)
Auckland University statistics professor Thomas Lumley sounds a note of caution, noting less ambitious academic efforts to try to identify the value of certain Ivy League MBA degrees to businesses, particularly those earned by CEOs, failed to find evidence of any effect.
Attempting to read into an individual director's performance having caused a particular company's financial performance is likely to be a stretch, he says.
"It may be due to things like having a good CEO, or the directors are just lucky," he said.
There was also a possible alternate explanation: "Maybe they don't do anything?"
Professor Jilnaught Wong, across campus from Lumley in the financial account department, thinks they do matter.
"I'm sure they do."
Not that he's able to easily prove this.
"No, we can't. There is a multivariate explanation. Most people want to be able to say 'this is the silver bullet,' but it could be a combination of directors - diversity is said to be a real plus - and they get this thing called synergy."
While he appreciates shareholder returns are an attractive measure for readers with stock or KiwiSaver portfolios, Wong notes this is narrow and doesn't take into account any lag between board decisions and those decisions having a market effect.
"How do you judge performance? Is it just financial results? Corporate social performance? Growth in share price?"
Directors themselves - at least those who, like Knowles, have done well under the measure - tend to prefer a longer-term view, but agree shareholder returns are the ultimate goal.
Julia Hoare (2nd/33), who's risen to deputy chair of a2 Milk as the company has soared in the past few years says: "I totally agree that financials are incredibly important - we are there at the behest of shareholders, after all - but I do what's in the best interest of the company," she says.
"My lens on that is it has to go one step further and say we are there at the behest of shareholders to do what's best for the company in the long-term."
Gráinne Troute (3rd/33) has similar issues over long-term focus, but also concedes share price is never far from your mind when directing.
"It's always there, you never get away from it, because that's ultimately how you're judged," she says.
Well-known chairman Michael Stiassny (31st/33) says the real challenge for directors comes with "struggling companies" which he says may not be treated kindly by the stock market.
"Ones in tricky times, or growing fast, certainly from a short-term performance standpoint, may not be the highest-performing in terms of the measure's you're using," he says.
He acknowledges turning these firms around should see improved returns for shareholders, but says there's only so much a single director can do.
"That's the ideal situation, definitely. There is inevitably a degree of it's not until you jump in that you realise whether or not you can make a difference," he says.
"It's important not to discourage directors from involving themselves on the boards of those companies."
One markets veteran, who prefers to remain anonymous given both the frankness of his views and his need to preserve professional relationships, said of the Big League Table: "I think you've got it about right."
He has some quibbles on the margins, but says the metric ranking matches his experience and offers savage comment on some: "He's stayed way too long"; "He's a disaster. He's hopeless"; "Pro-forma, he'll just turn up for meetings."
Somewhat alarmingly, given his insider knowledge and participation in voting large blocks of shares for NZX directors, the veteran says he too is often in the dark as to whether a boardroom is working or not.
"It's hard for us as an outsider to tell what's working and what's not. There's board confidentiality, and these communications between the chairman and CEO are all private," he says.
"It's only afterwards we find out."
Trying to account for what successful directors actually do, in order to measure their performance and encourage more of it, first requires an understanding of where boards have come from and their evolving current role.
Auckland University professor Susan Watson, a specialist in corporate governance and law, says while the legal concept of the boardroom has been around for a thousand years, directors historically were largely treated by business as "ornamental" - or in the modern parlance, "trophies".
"The board of directors are about as old as the corporation, they've been around since the year 1200. But it used to be that board were passive. Throughout most of the 20th century it didn't matter if they even showed up to meetings," she says.
This state of affairs, where the boardroom was considered more a snooker room, persisted until the cult of the chief executive began to run amok.
"The idea of the role of the board acting as protection for investors and shareholders really took hold in the 1980s in response to managerialism," she says.
The present incarnation - emphasising independent directors who represent shareholders by holding the chief executive accountable - is largely governed by Companies Act obligations for directors to act reasonably and in the best interest of the company.
(Ornamental directors take note, the Mainzeal case highlights additional obligation to ensure solvency.)
In return, directors have some of the most generous working conditions in the country, with no boss, each part-time posting having only a few fixed hours each month for meetings and an average fee per seat - according to an Institute of Directors survey last year - of $45,000 per annum.
This fee roughly doubles for chairing roles and, as multiple seats are usually part of the profession, can made for a lucrative career.
The consensus view of the most important decision a director can make for their company is the appointment of a chief executive, whose performance, or lack of thereof, can make or break a firm.
Knowles says this call is "by far the biggest" decision a board will make.
"It has the biggest influence on outcomes. There's no such thing as a perfect CEO, and a key part of the board is the bits they're good at, the board lets them get on with it - and bits they're perhaps not quite so good at, there're checks and balances, and support is in place."
Troute calls this high-level HR - juggling skills around a chief executive - "obviously one critical component".
Auckland University's Watson says, despite a lack of a consensus measure on who or what actually makes a good director, decisions to appoint them are still being made.
"Who knows?" she says. "As a general rule of thumb, people do make these distinctions and judgements all the time: On the evidence that some people are invited onto boards, and others aren't."
Method: How the numbers were crunched
The Herald's "Directors of the Decade" takes a broad approach rather than a deep one, seeking a metric that is easily available, consistent, and with a nationwide spread.
In this case, we analysed company shares listed on the NZX, pared with their directors' tenure as recorded on the Companies Register.
Choosing a 10-year period between January 1, 2009 and December 31, 2018, was arbitrary - although there's alliteration with "directors" and "decade" - but intended to capture the current directing pool rather than that of the past.
As it turned out, only one of our final pool - Sir John Anderson (29th/33), who died last year - was no longer active as a director at the end of the target period.
The performance metric settled on was average gross return per share, a measure looking at 12-month changes in adjusted gross share price, which takes into account stock price movements and dividend payments.
This was in turn weighted against overall NZX performance during the tenure period to try to capture whether markets had been out- or under-performed.
Further refinements were made to limit volatility, culling small-cap stocks and back-door-listing like Veritas.
Only markets for ordinary shares were considered, in order to exclude illiquid and flat markets in more exotic securities.
And to capture both a pool of professional directors, and ensure each subject had multiple data points to measure, those with three or fewer public board postings were ignored.
The analysis initially looked at 364 stocks, filtered to 168, and 1986 directors, titrated to our busy pool of 33.
The resulting measure, displayed in a How they Rate table and accompanying visualisation showing director-by-director details, is simple and with obvious limitations, but such limits are easily understandable because they are simple.
It does not capture a director's private company performance, as financial information for these firms is rarely public or consistent. This means directors of recent high-profile collapses, such as Mainzeal and Ebert, unfortunately escape being measured.
It also misses New Zealand directors' activity on companies listed elsewhere, as Mike Allen (33rd/33) was keen to point out. Shares of his Coats Group - which effectively flatlined on the NZX over the past decade - have tripled in value since migrating to the London Stock Exchange in 2016.
CORRECTION: An earlier version of this article incorrectly listed Mike Allen's directorships as including Mercury NZ. The former director of that company is Michael David Allen, not Michael Nicholas Allen, the subject of this story. The interactive graphic also included a photo of the wrong Michael Allen. The Herald apologises for the error.