INTOUCH : Boards undervalued?

If we want to upgrade the calibre of local boards, the pay gap between Kiwi and Australian directors needs to narrow.
That’s according to Sherry Maier, specialist in director remuneration and senior consultant at Moyle Consulting. Moyle has recently completed survey of director fee levels which shows that small percentage of companies have contributed to significant 20 percent jump in fees for both directors and chairs. But there’s still gap of between 50-130 percent between New Zealand and Australian remuneration figures.
While the comparative size and number of listed companies across the Tasman make parity unlikely, that gap is just too big and undervalues the input of directors as well as their increasing workloads, says Maier.
In the current climate, companies are reluctant to raise director fees – 80 percent of surveyed companies made no change, but this reflects lack of understanding about the board’s role in building and protecting shareholder value.
“When company is doing well, nobody gives the board pat on the back. But when the going gets tough, the board often takes the heat. In tough times, the time commitment and workload escalate and, unlike executives, directors face personal legal liability. They should be fairly compensated for the very real risks and responsibilities involved.”
Other key findings from the survey, which analysed remuneration levels, governance issues, and director attitudes in 226 organisations, include:
• Time per directorship has increased some 15 percent.
• Auckland non-executive directors earn the highest fees (median $39,750), followed by Wellington ($32,028), regional North ($31,000), Christchurch ($30,000) and regional South ($22,679).

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