Directors spend more time on board responsibilities
Directors are spending more time on board responsibilities, the latest annual Directors’ Fees Report produced by the Institute of Directors and EY New Zealand has found. Hours worked by non-executive directors increased 10% since last year to 140 hours per board. More boards are meeting over six times a year too.
Institute of Directors chief executive Kirsten Patterson says hours worked by directors have increased year-on-year due to an increasingly challenging operating environment.
“Regulators continue to target directors with more accountabilities. As a result, directors’ roles and responsibilities are increasing.”
The 2019 report includes remuneration data for 2,027 directorships, 1,393 organisations and 803 IoD members.
Non-executive directors, who made up 61.7% of the report’s voluntary participants, had a median fee increase of 3.0% since last year. The median fee for a male non-executive director is $47,000; the median fee for a female is $40,000. (The difference reflects the types of directorships held – not that females receive less than their male counterparts on the same board.)
As for 2018, the average number of directorships held was four.
Non-executive chairs, who made up 21.9% of the report’s participants, had a median fee increase of 2.5%.
The largest median fee industry movement (+10.8%) was within the information, media and telecommunications industry. The lowest (-4.8%) was within the construction industry.
EY New Zealand Partner Una Diver says board governance continues to take place in a rapidly evolving landscape, putting pressure on directors in all organisations to remain current in their thinking and vigilant in their responses.
“All stakeholders – management, employees, shareholders, government and consumers are asking more from organisations, placing a further weight on boards to rise to the challenge of meeting their expectations.”
Published annually, Una Diver says the Directors’ Fees Report provides consistent and open reporting on director fees.
“This helps build trust and confidence in business and corporate governance.”
Kirsten Patterson says while hours worked by directors and responsibilities are increasing, it’s an exciting time to be a good director.
“It’s important that directors receive competitive and reasonable remuneration. In particular, so that skilled and experienced people are attracted into governance and are properly rewarded for the work they do.”
A copy of the full report can be ordered through the IoD website.