Compensation for directors of publicly traded companies rose significantly between 2008 and 2010, according to the Conference Board of Canada’s 2011 Canadian Directors’ Compensation and Board Practices report.
Released this morning, the report found that total compensation to outside directors for their board room service rose to $112,651 from $84,452 in 2008. It found 80% of firms have adjusted director compensation since 2008.
Connected with this compensation rise, the report noted expectations for company directors have also been rising. Directors are expected to increase time commitments to their duties, assume additional responsibilities and take on greater personal liability.
The conference board is predicting that that trend will continue.
“It is expected that governance standards will continue to evolve and that organizations will have new heights to reach,” said Karla Thorpe, the conference board’s director of leadership and human resources research, in a statement.
“Against even current standards of good governance, boards still have a lot of room for improvement. As the bar continues to be raised, more dramatic changes in board practices can be expected.”
The report found that directors are increasingly extending the scope of their roles and responsibilities – requesting more information, analyzing more data, holding more meetings and adding committees and board members.
Responding organizations indicated that directors are spending an average of 128 hours a year on board business.
“The question that remains unanswered is whether boards are becoming engaged at an appropriate or optimal level, or are crossing the line between board and management areas of responsibility,” Thorpe said.
Jenny Wagler
@JennyWagler_BIV