Guildford had been warned to curb his heavy drinking by the All Black management following a series of incidents but had broken that agreement after the Tri Nations defeat to Australia late last month.
"After the game Zac obviously had had a disappointing match and felt a lot of pressure. He did drink excessively at the team hotel and basically breached the agreement with the coaches," said Shand, who has since sat down with Guildford and his agent in order to resolve the issue.
Guildfordis the only fit player not to have featured in the All Blacks' matchday 22 for either of their two opening World Cup games but Shand insisted his drink problem had nothing to do with his non-selection.
Instead he claimed the issue was being dealt with successfully by the player and that today's press conference had only been called to dismiss rumours surrounding his non selection.
"He's really taken ownership of it," added Shand.
"He's been awesome in the last couple of weeks and we really back this environment that we've got here to help people with those off-field issues, so ultimately good rugby players can perform on the paddock."
As for the man himself, Guildford admitted he had made mistakes and let plenty of people down as a result.
But he is now keen to put the problems behind him and fight for his place in the All Black squad for Saturday's crucial Pool A clash with France at Eden Park.
"I'm taking positive steps to make sure it doesn't happen again," said Guildford, who had agreed to drink moderately when initially confronted by the All Black coaching staff after the loss to South Africa in Port Elizabeth on August 20.
"Personally, I feel I let myself down and the team down.
"Obviously a poor performance on the field in a week that I felt the pressure at times led to me making a few bad decisions off the field following that game.
"I feel now that I have got a chance and I want to make the most of it."