Article: A snapshot of the 2017 NFP Directors’ Fees Report

Remuneration package decisions are anything but easy, particularly in the not-for-profit (NFP) sector. To run a sustainable organisation with good governance, you need to attract and retain the right people with a fair offer.

Introducing Directors’ Fees Reports

Putting a monetary value on a board member’s position is a tough decision. As each position has its particular duties, the process of valuation is often complex and can leave boards questioning whether the remuneration expenditure is comparable to other organisations.

To put decision makers’ worries at ease, Strategic Pay has a reliable source of information that can help: the Not- for-Profit Directors’ Fees Report.

Pulling information from our annual survey results, the report offers an overview of current trends and practices within the not-for-profit sector. This, in turn, enables boards and decision makers to compare, contrast and evaluate their own methods with those of the wider industry.

What does the Strategic Pay report cover?

This year’s survey results are a combination of insights from Strategic Pay’s database, publicly available data and our not-for-profit mailing list’s questionnaires. For the fifth year running, the report covers trends and practices in the NFP sector, providing insight into the following:

  • Annual fee schedules for both executive and non-executive chair, deputy chair and directors positions
  • Director’s fees schedules
  • NFP board policy and practice analysis. This includes board meetings, committees, workload, fee review and gender analysis
  • General market board policy and practice analysis.

In terms of structure, the report sorts statistics on annual fees and total hours by category. These categories include industry, turnover, asset size, type of organisation, shareholder funds and number of employees. Notably, all organisations in New Zealand are welcome to participate.

What are 2017’s insights?

While there is a vast array of takeaways from the report, some of the highlights are:

  • Reviews happen annually for 38 per cent of organisations, whereas 10 per cent do so biennially and 55 per cent variably
  • The most common factors for board fee reviews are company profitability and market data
  • Board meetings last for an average of four hours for eight per cent of large boards, 61 per cent medium boards and 31 per cent small boards
  • Board sizes are defined as follows: 1-6 directors is seen as small, 7-10 medium and more than 10 large
  • Meeting frequency has increased to 50 per cent of large boards meeting bi-monthly; 88 per cent of boards have re-election policies
  • The top priorities for the next year are strategic planning and risk management
  • Gender analysis suggests the number of women taking board roles has increased since 2016.

If you would like an in-depth overview of Strategic Pay’s report, please feel free to reach out to our team for more information today.

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