Australian board directors need to be better remunerated as a result of greater pressure on boards, a new study has revealed.
The inaugural Survey of Australian Boards, conducted by business executive and search consultancy Hattonneale, found that board directors are under increasing pressure to devote more time to board commitments, especially in the economic downturn, and as a result need to be better remunerated.
Commenting on the results, Hattonneale director Jane Neale said: “One of the key issues facing directors is the pressure to get more involved in strategy and operational issues and to leverage their experience of working in tougher economic times. As a result, many directors are already questioning whether the increased risk and declining benefits outweigh the desire to be involved.”
According to Neale, some respondents believed that turning board duties into a full-time role with a full remuneration review would be one way to overcome these challenges.
Another issue highlighted by respondents was board recruitment and diversity and the difficulty of getting ‘new blood’ on to boards.
Hattonneale director Anne Hatton said that in many cases directors still use their own networks for board selection, which is not advisable.
“The danger is that the current pressure on boards is driving conservative behaviour among existing directors and is having an adverse effect on the appetite for boards to bring new blood and diversity to the table,” she said.
