The survey found 36 percent of respondents had turned down a governance role in the past year, with more than half of them citing time as the reason. Photo: 123RF
Company directors say their working hours are back at levels last seen during the pandemic, and many are turning down roles due to a lack of time.
The latest Directors' Fees Report from the Institute of Directors (IoD) and Ernst and Young (EY) showed the median fee for non-executive directors was $52,000 in 2023, up 0.9 percent from a year ago.
The average hours worked increased to 132, up from 111 in 2022, and back to 2021 levels during the Covid pandemic.
The survey found 36 percent of respondents had turned down a governance role in the past year, with more than half of them citing time as the reason.
The report was put together with data from 3951 directorships held by 1124 IoD members across 1695 organisations.
EY partner Una Diver said despite directors' fees rising at a much slower pace than wages, more than half of directors were happy with what they received.
"But it's absolutely true that the changes in both the external environment, so the things we're facing economically, and of course, the continuing changes in regulation as it relates to the role of a director, is impacting on workload and we don't see that changing at all."
IoD general manager of learning and engagement Michael Fraser said directors who were "in it for the money" were setting themselves up for disappointment.
"We know that while [remuneration is] a factor in taking up some kind of governance role, it's probably not the dominant factor, there's that clear sense of purpose and why sitting there as well."
Diver said directors' fees in New Zealand were conservative compared to other parts of the world, for example, compared to similar-sized boards in Australia and the United Kingdom.
"[From EY's perspective] we think that there is room for increase to actually adequately recognise and compensate directors for not only their role in the organisation but also to recognise the significant challenges of the role," she said.
Jump in personal liability insurance
The survey found a sharp increase in the number of directors covered by directors and officers (D&O) liability insurance.
It said 98.7 percent of respondents were now insured, compared to just under 89.5 percent in 2022.
"The growing complexity of governance, the uncertainty that surrounds issues such as climate change and the inclusion of personal liability in legislation are all combining to increase the potential risks associated with being a director," Diver said.
"Take up of D&O insurance has been increasing in parallel with this."
