Should You Pay Your Not-For-Profit Directors?
Rising living costs are impacting who can afford to serve on voluntary boards. Practice how you could consider remunerating, or otherwise supporting, your board members. What factors should you consider to ensure you make the right decision for your organisation. Then download our free Decision Tool to support your board's decision-making.
What You'll Learn
This PracticeLab quiz helps you revisit the essential concepts that guide safe, quality practice. Answer the questions, read the explanations, and build confidence in the knowledge you bring to your role.
- 1
Benefits to Better Supporting Board Members
Consider the benefits to better supporting board members whether by way of direct payments or other forms of support.
- 2
Different Options to Remunerate Board Activity
There are many different ways an organisation can remunerate board activities.
- 3
Alternatives to Direct Remuneration
How an organisation can support board members to participate actively in their board activities without providing direct remuneration.
- 4
Legal and Constitution Considerations
What do legal or constitutional restrictions might NFPs need to consider before they introduce director payments.
- 5
Mission and Public Perception
Consider the risk of a negative perception where the public, or key stakeholders, believe funds should go toward beneficiaries rather than directors.
- 6
Suitability and Capacity to Pay
Not all NFPs should pay their boards. Suitability depends on the complexity of the organisation, the time commitment required, and financial capacity of the organisation.
- 7
Increased Accountability
How might your expectations change regarding performance, effectiveness, and risk management, if you remunerate your board members.
- 8
Structuring and Benchmarking Director Payments
Explore practical approaches to determining appropriate remuneration levels, including how to benchmark against comparable organisations and sector norms. Covers different payment models such as honoraria, sitting fees, and expense reimbursements.