Sunday, July 22, 2007

Board remuneration: over-laden pack animals on public and third sector boards

I won’t make a habit of quoting the accountancy press, but an article in Friday’s Accountancy Age did make me think. It asked who would be a non-executive director?

It suggested that it was “disconcerting” that NEDs were expected to have expertise and knowledge from accounting to law as well as bear the burden of multiplying risks like “over-laden pack animals”.

The article was mainly concerned with FTSE NEDs, yet according to the Independent Commission on Good Governance in Public Services there are over 450,000 people in the UK who hold governance positions (excluding local government councillors). They are governors in schools, hospitals, police authorities, housing associations and national public bodies.

Many – probably most – of those huge army of board members and governors in the public and third sectors are unpaid. This is a credit to British civil society.

It is inevitable (and often desirable) that the larger boards and governing bodies of larger organisations will move towards more professionalised governance – in the sense of “board remuneration”. However, it would be sad if the voluntary ethos was lost.

The over-laden pack animals – loaded with more and more risks to think about - will increasingly expect carrots.

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