Non-executive directors (NEDs) are responsible for making critical strategic decisions and for overseeing the management of a company without the benefit of observing the business on a full-time basis. This requires particular skills, knowledge, experience and business judgement, for which they need to be fairly remunerated, says Parmi Natesan, CEO of the Institute of Directors in Southern Africa.
Determining fair remuneration is complicated due to the following:
NED contributions are made in a number of different ways, requiring different time commitments;
there is no consistency on the prescribed number and duration of standing meetings per annum; and
there is no uniform method of remunerating NEDs.
Each organisation will need to consider its specific circumstances and needs from a NED, when determining what would be fair remuneration.
In order to provide high-level benchmarking guidance, the IoDSA has produced its 6th Edition of the Non-Executive Directors’ Fees Guide. This edition is based on a desktop review of publicly available data extracted from 178 JSE listed companies, including the Altx companies. The purpose of our NED Fees Guide is to provide high-level insights for boards, and specifically remuneration committees, around:
the various NED fee structures being utilised; and
the average annual fees for board and committee members.