New Zealand board members are becoming more likely to be paid separate fees atop their base salary, according to research by Chapman Tripp, a law firm that found that 52 of the top 75 paid committee chairs and/or directors were paid above their base fee. Chapman Tripp partner Roger Wallis told BusinessDesk this was likely a result of the increased workload board members are being expected to shoulder. “If those are going to require directors spending an additional two or three days a month on
onth on their roles – doing site visits, for example – that could increase their workload from three days a month in the past to five days,” Wallis said.
“It makes sense they should be paid more.”
The firm’s 2019Corporate Governance – trends and insights report backed up this idea, with many directors having complained of the huge volume of information they are expected to wade through in order to serve on the board.
This increased workload is often lost on shareholders, though the increased remuneration is not – especially if the company had a flat year, and board members are asking for a sizeable increase.
“A better model, more aligned to normal commercial practice, would be to seek an adjustment every year, or to set a cap which allows for small adjustments as appropriate over a few years,” the report posits.
