Director fees up but satisfaction falls

Directors’ fees are up, and the gender pay gap has shrunk, but satisfaction with remuneration has fallen, the latest Directors’ Fees Report reveals.

Produced by The Institute of Directors (IoD), in association with EY, the 2025 report provides key information on director remuneration and board practices in Aotearoa New Zealand. This year, it brings together data for 5,169 directorships held by 1,158 directors across 1,957 organisations.

The median fee for non-executive directors increased by 7.4% to $53,700 (up from $50,000 in 2024). However, satisfaction levels declined to 58.1% (down from 65% in 2024).

The IoD Governance Leadership Centre’s Guy Beatson says the rise in fees and fall in satisfaction appear to be driven by the increasing workload and personal risk associated with governance roles.

“Fees were essentially flat last year, so we are seeing a bit of rebalancing with this lift,” Beatson says.

“But the message coming through loud and clear is that the workload is increasing in the face of economic pressure, regulatory changes and higher expectations from shareholders and stakeholders.”

Among directors who were unhappy with their remuneration, the top concerns were time commitment (85%) and increased workload (55.4%). Other factors included personal or reputational risk (50.7%) and compliance burden (27.8%).

Workload pressure was also evident in a small drop in the total hours worked to 161 (178 in 2024). Directors appear to be pulling back from work outside of formal board meetings, such as CEO coaching, health and safety site visits, or professional development and conferences, to focus on their core duties.

“This suggests directors are becoming more selective about how they allocate their time beyond structured board activity. It highlights the ongoing challenge of balancing the increasing demands of governance with realistic time commitments and personal sustainability,” Beatson says.

There was good news on the gender pay gap. While female non-executive directors are still paid less than their male counterparts, the ‘discount’ narrowed to 2.4% in 2025 (down from 9.3% in 2024), says EY Partner Una Diver.

When those who did not state their gender were excluded, the median fee for male directors was $55,000 (up from $50,000 in 2024) while the fee for women was $53,700 (up from $45,000 in 2024).

“While it is good to see the gap closing, underlying structural imbalances between the genders persist,” Diver says.

“In particular, the gender fee gap is sustained by a ‘representation gap’ in leadership roles. Men remain more likely to hold senior positions such chair, or serve on large companies, while women continue to be over-represented in lower-paid trustee roles.”

Board appointments in New Zealand continue to be shaped largely by personal and professional networks, she says. The most common method for sourcing new board members remains referrals from current board members, cited by 57.9% of respondents. This far outpaces other approaches such as recruitment firms, advertising or using internal human resources.

“However, these numbers are not equally applicable across all organisation types with the use of informal networks predominantly happening in private companies (44.3%) and not-for-profits (37.9%). For other organisations, fewer than 5% reported relying on word of mouth,” Diver says.

“While this pattern reflects New Zealand’s relatively close-knit governance ecosystem, it also raises important questions about access, diversity and succession planning. Informal channels may offer efficiency and assurance for incumbent boards, but they also pose the risk of entrenching homogeneity or boards missing out on emerging governance talent.”

You can find more on the latest Directors’ Fees Report here.