Is it all worth it? ... Well, yes.

It's not quite like life on Mars; but the search for hard evidence that good governance does lead to improved organisation performance and better shareholder returns has been almost as elusive.

Now at last a study of over 600 public companies in Britain, "Governance and Performance in Corporate Britain", by the Association of British Insurers, has come up with some strong indicators:

□ Over a five-year period, the shares of companies deemed to be well-governed delivered a return about 4.5% per annum higher than their industry peer group;

□ Well-governed companies showed a lower volatility of returns over time;

□ Poor governance was associated with 3-5% per annum under-performance and a smaller (but measurable) decline in the market value of assets;

□ And the evidence indicated that good governance led to higher performance, rather than vice versa (and it was a causative relationship, not just a correlation).

The survey also came to the unsurprising conclusion that having more Non-Executive Directors on the Board (NEDs, directors who don't draw a salary for their day-job) led to improved performance. But the key here was balance: having too many NEDs was associated with lower profitability. This suggests that having a mix (the British practice) might be preferable to current New Zealand and Australian - and increasingly American - practice, where most or all the directors are drawn from outside.

So we finally have some evidence to support what many of us have long believed (for goodness’ sake, it’d be a boring role if all we did was monitor compliance and identify risk!). Perhaps this will start to counter those popular anecdotes about directors - like defining the difference between a director and a supermarket trolley (answer: a director may hold more food, but at least the trolley has a mind of its own).

Maybe this survey is the terrestrial equivalent of finding water and organic chemicals on the Red Planet. I hope it will give directors even more reason to leap out of bed in the morning, looking forward to the Board meeting - and confident, in the words of the late Sir Peter Blake, that it will “make the boat go faster.”