Board Remuneration
Processes & Practicalities

To Pay or Not to Pay?
Are you considering paying your board members?

Do you want support in developing your business review?

Would you like more advice about what the issues are?

Central Consultancy are on hand to help guide you through the Board Remuneration process.

Contact us at info@centralconsultancy.co.uk or call us on 0121 285 6161 for more details.

In the meantime, continue reading for a brief introduction to some of the areas to consider.

Please note:

Registered Social Landlords in Wales, please click here

1. Making The Business Case

If you decide you want to think about payment the first question is to decide what outcomes payment will deliver. Remember - payment is about change. There is no case for paying the same old same old to do the same old same old.

2. What Change Do You Want to See

  • Why might you want to pay?
  • Payment must be in the best interests of the organisation
  • Is there a business need to pay? This might relate to  your ability to attract suitably skilled candidates now, or in the future, changes in the operating environment,  increasing complexity, diversification, new sources of funding, new level of risk, consolidation and restructuring,  reducing board size,  streamlining the governance structure
  • Specific improvements you expect to see

3. Who To Pay

You may want to consider paying the board Chair only, Chair and Committee Chairs, Group Board only (in a Group), or pay everyone .... ​

In which case you need to think about:
  • Implications for different groups of board members
  • Constitutional arrangements which allow flexibility  
  • Dealing with multiple appointments in a group

4. How Much To Pay

You will want to benchmark, but that doesn’t give you the answer. Remember
  • Reputation of your organisation and of the sector
  • What is reasonable and proportionate to your size, complexity and resources – you might not want to be an outlier!
  • Dealing with conflicts of interest.

5. Managing Performance

  • Should payment be linked to performance? And / or specific duties?
  • Should payment be linked to skills based boards?
  • How robust is your appraisal system? Does it focus sharply on performance?
  • How will you evidence improvements in governance?
  • How will you deal with under-performing board members? ​

6. Implementing Payment

If an in-principle decision is taken to pay board members, a range of other issues will need to be considered:
  • Board members in receipt of benefits
  • Board members who do not wish to receive payment
  • Pension issues
  • Tax position
  • Payment of expenses for paid board members
  • Payment to service companies
  • Reviewing levels of payment
  • Consultation and securing agreement from / informing stakeholders
  • Avoiding ‘employee status’ risks
  • Arrangements for performance review
  • Disputes with board members
  • Penalties for non-attendance at board meetings by paid board members
  • Payment for members of commercial boards
  • Updating governance documentation.

7. Learning From Others

What do English providers who decided to pay say? And what about those who decided not to pay? What is their view? ​

8. Next steps

Consider a board discussion covering  
  • The purpose of Board member remuneration – views, arguments and experience
  • Handling the debate and making the decision
  • The principles of Board member remuneration in practice  
  • Establishing if there is a business case
  • Developing the business case
  • Practical steps to implementing
  • What else is involved – review and evaluation of impact ​