What should directors be paid?

Director remuneration has always been a balancing act. Boards need people with the time, skills and experience to govern well, but fees also need to withstand scrutiny from shareholders, members, funders and the public. As the demands of the role change, the question of what constitutes fair remuneration changes with them. 

Behind the headline fee movements are some more interesting questions about how boards decide what governance is worth, what happens when the role changes faster than the fee, and whether the processes used to set remuneration are keeping pace. The 2026 Directors’ Fees Report provides the data behind those questions, with detailed findings on fees, workload, review practices and director sentiment. 

Reviewing the review  

Director remuneration can be an awkward boardroom conversation because directors may be discussing their own fees. That makes the process important. 

Annual reviews remain the most common approach, as they have been since the first Directors’ Fees Report in 2010. Back then, 41% of boards reported reviewing fees annually; this year it is 36.4%. What is changing is how boards arrive at their fees. Internal review still dominates, although there has been some movement towards external advice and benchmarking. Nearly three in 10 respondents now use an external provider, up from around one in four last year. The movement is modest, but more boards are looking outside their own boardroom when testing whether their fees remain appropriate.  

Approaches also vary by organisation type. Almost two-thirds of cooperatives review annually. Listed company respondents stand out for external input: 62% report using an external provider, more than twice the proportion among unlisted private company directors. 

Different organisations will reasonably take different approaches to remuneration review, depending on their context. A listed company seeking shareholder approval for a director fee pool operates under different arrangements from a public sector board or charitable trust. 

Fees can be left untouched because they have always been left untouched. Then a new director arrives, somebody eventually looks at the market, and the board discovers it has fallen well behind. A large catch-up increase may be entirely justified, but it is much harder to explain than a series of measured decisions made over time. 

The public sector provides some context for this. Crown entity directors recorded the lowest levels of fee satisfaction in both the 2024 and 2025 fees surveys. Since then, changes have been made to remuneration settings for Crown-owned company directors and to fee ranges under the Cabinet Fees Framework, following concerns that parts of public sector governance remuneration had fallen behind relevant benchmarks. 

Keeping remuneration under regular review can help avoid that kind of catch-up. BRANZ provides a useful example. It commissions an independent tailored fee review every two years. Its remuneration review is also linked to the board’s skills matrix and performance review, putting it into the wider governance work programme rather than treating it as a one-off pay discussion. 

That discipline is helpful because in many organisations the board does not have the final say on what directors are paid. Shareholders or members may be asked to approve a fee pool or particular remuneration settings. They may also have quite different motivations and perceptions from those sitting around the board table and are unlikely to see all the work that happens between meetings. 

That means the quality of the information put in front of them matters. A market benchmark on its own tells shareholders or members very little about why a particular fee is appropriate. They need enough information to understand how the organisation has changed, what the role now requires, and why the comparison being put forward is relevant. 

Independent evidence can strengthen that explanation. It does not remove the judgement involved but it gives boards a stronger basis for explaining why a particular level of remuneration is reasonable. Benchmarking is part of that process but it is not the sole answer. 

Organisation size and industry are useful comparators, but two organisations with similar revenue can make very different demands of their directors. Regulation, organisational performance, stakeholder expectations and management capability can alter the nature of the governance job. 

The role itself can also change over time. A board governing an organisation through rapid growth, regulatory change or a difficult turnaround may be doing a very different job from the same board several years earlier when fees were set. 

These demands can move in either direction. A growing organisation may demand more from its board. A business experiencing a sustained downturn or a material reduction in scope may have good reason to hold or reduce director fees. This year’s results also show how uneven the market can be: average fee movements by organisation type range from 3.6% for unlisted private companies and not-for-profits to 9.4% in the public sector. 

Reviewing fees does not create an obligation to increase them. It simply means the board, owners or other decision-makers are not relying on an arrangement whose rationale has been lost over time. 

Time still has a price  

Time has been a recurring story in the fees surveys. Median annual workload for non-executive directors rose from 161 hours last year to 175 hours in 2026. In 2013 and 2014, the reported median annual time commitment was 82 and 88 hours respectively. It has moved around considerably since then, but the 175 hours recorded this year is about twice those earlier levels. The relationship between workload and perceptions of fee adequacy is also worth examining. 

Additional analysis shows that among respondents who considered their remuneration adequate, the median workload was around 152 hours a year. For those who considered it inadequate, the median was 176 hours. There are too many variables to suggest the extra hours cause dissatisfaction. Organisation type, fee level and the nature of the role may all influence that judgement. 

Even so, time commitment remains by far the most common reason directors give for considering their remuneration inadequate. What has moved more noticeably this year is concern about personal and reputational risk and compliance.  

The rise in risk concerns deserves attention. A director can spend months attending ordinary meetings and reading ordinary papers. Then a serious health and safety issue, financial problem or executive failure occurs and the nature of the role changes overnight. The accountability was there all along, even if it was less visible. That is why remuneration cannot be assessed purely by reference to an average month. Directors are appointed on the basis they will be there when something departs from plan and the demands of the role increase sharply. 

Overall satisfaction with remuneration has risen from 58.1% in 2025 to 67.6% this year. While that is encouraging, it does not mean the tension between time, responsibility and fee has disappeared. Nor is all of the work visible in the board calendar. Calls, follow-up reading and judgement between meetings can become significant when an issue cannot wait, which is particularly relevant when fees are being considered by people who do not sit on the board themselves.  

Governance cannot sensibly be valued simply by multiplying hours worked by a rate. A fixed annual fee is generally more appropriate for a director role than an hourly rate. It recognises the ongoing responsibility, judgement and availability that come with the appointment, including periods when the demands of the role increase unexpectedly. Time commitment still matters but it is only one part of deciding what the role is worth. 

The price of leadership 

The move from director to chair changes more than where someone sits at the board table. The chair remains one among equals but takes a particular responsibility for how the board works as a whole: where it focuses its attention, how directors contribute, how challenge is handled and whether discussion is turned into clear decisions.  

Much of that leadership happens outside scheduled meetings. The chair is often the CEO’s key governance contact and sounding board, helps shape the agenda, and manages important stakeholder relationships. When an issue cannot wait for the next scheduled meeting, the chair is also likely to be one of the first people called. 

That helps explain why the remuneration attached to the role is more than a simple allowance for chairing meetings. Additional analysis shows the premium varies considerably across organisation types. Cooperatives sit at the upper end, with a median chair premium of around 106%, while unlisted private companies are closer to 69%.  

The appropriate premium depends on the scale and nature of the chair’s responsibilities. A chair dealing with a difficult transition, complex stakeholder relationships or significant board performance issues may be carrying a very different load from one leading a settled, well-supported board. 

The role can also involve considerable time, judgement and emotional labour, particularly when the board is under pressure. Chairs may also receive less candid feedback than other directors and may have fewer people inside the organisation with whom they can work through a difficult issue. The premium needs to account for that responsibility as well as the additional time involved. 

Who gets the opportunity to take on that responsibility matters as well. Our 2026 governance diversity research found gains in board representation have not flowed evenly through to leadership positions. As part of that research, we examined board and chair representation across the 53 NZX-listed companies and a select group of Crown entities. In the NZX53, women make up 35.9% of unique directors but 28.3% of chairs. The selected Crown entities show the same broad gap between board participation and chair representation, although that sample is much smaller. Committee leadership presents a more mixed picture, suggesting there are pathways into leadership that may not yet be showing up to the same extent in board chair appointments. 

Leadership brings greater influence and, usually, higher fees. Chair succession is therefore not separate from the remuneration discussion. Yet the 2025 Director Sentiment Survey found only 37.1% of directors said their board had a succession plan for the chair, while 41.5% had succession planning for board members or committee chairs. Boards should be thinking about who is being given opportunities to chair committees, lead items of board work, build stakeholder experience and develop the judgement needed for future chair roles. 

One gender gap can hide several stories  

This year, the median fee for male non-executive directors is $58,000 compared with $54,000 for women, a gap of 6.9%. For non-executive chairs, the medians are the same.  

The gap remains an important finding, but the underlying results show it is not uniform across the governance market. When the data is broken down by organisation type and board role, female medians are higher in some parts of the market and male medians in others. Because fee levels also vary considerably between organisation types and roles, the headline figure cannot show whether the difference is concentrated within particular role categories or is also influenced by the mix of roles and organisations represented in the male and female samples.  

That means representation is also part of the remuneration picture: who is appointed to boards where fees are higher, who progresses into chair and committee leadership, and who serves in lower paid or unpaid governance roles. Our governance diversity research reinforces that point, with women less represented among chairs than among directors in the NZX53 sample.  

In listed companies, female non-executive directors have a higher median fee than male non-executive directors. That result sits alongside lower representation of women in listed company chair roles. The two findings point to different issues: how directors are remunerated within role categories, and who is represented in leadership roles that attract higher fees.  

The same distinction is relevant to the absence of a gap in median chair fees this year. Equal median fees are welcome but they do not tell us how evenly chair roles are shared between women and men. Boards need to look beneath the overall figure: who is sitting on which boards, who is progressing into higher paid leadership roles, and whether people doing comparable work are being remunerated consistently.  

Previous fees surveys have also shown women more strongly represented in trustee and incorporated society roles than in many chair and executive roles. That distribution matters when the conversation turns to NFP remuneration, where unpaid service remains common. 

Voluntary does not mean ungoverned 

Whether a not-for-profit (NFP) organisation pays its directors is a legitimate choice. It should still be revisited as the organisation and the role change. 

Unpaid governance is concentrated heavily among smaller organisations. Around 95% of the unpaid NFP chair and governing body roles for which revenue information was available were in organisations with revenue below $10 million. More than eight in 10 were also in organisations with fewer than 20 employees. 

For smaller NFPs, affordability and traditions of voluntary service may influence decisions about board remuneration. It does not follow that the governance is less demanding. Some small organisations carry substantial responsibilities with very limited management or administrative support. Being unpaid does not reduce the governance responsibilities attached to the role, or the time and capability needed to discharge them properly. 

However, the data does not suggest unpaid directors universally want that to change. Around eight in 10 unpaid governing body members considered it appropriate for their role to remain unpaid. Among chairs, it was closer to six in 10.  

Voluntary governance remains a legitimate and valuable part of the NFP sector, and remuneration should not be treated as the inevitable marker of a more professional board. An organisation can grow considerably while its governance arrangements remain much the same. A board that once governed a small volunteer operation may later be overseeing a larger operation, material revenue changes and a more demanding risk profile. The remuneration approach inherited from the organisation’s early years may still be right, but the assumptions behind it may no longer be the same. 

An unpaid model also raises an access question. An organisation that relies entirely on unpaid governance is asking directors to absorb the opportunity cost of serving, and some people can do that more easily than others. The issue is not simply who is willing to volunteer, but who has the financial and personal capacity to do so. 

That does not mean paying directors automatically produces a better board, or that every NFP should introduce fees. It does mean boards should be alert to whether an unpaid model is narrowing the range of people able to put themselves forward. If a board expects specialist expertise, frequent involvement and substantial legal or reputational exposure, it should be conscious of the contribution it is asking people to make. 

Boards should distinguish between voluntary governance by choice and arrangements that continue simply by default. Voluntary service can sit comfortably alongside strong expectations of performance and accountability, but relying on history alone risks determining who can afford to govern the organisation. 

The sector is examined in more detail in the separate NFP Insights. 

What is governance worth? 

Director fees always compete with something else. For a listed company that may be shareholder returns or investment in the business. For a charity it may be money available for services. For a small owner-managed company, it may quite literally be the owners’ own money – money that could instead employ another person, reduce debt or be reinvested for growth. That makes reluctance to spend on governance understandable, though not necessarily economical. 

An organisation can save money on director fees and still pay dearly for weak governance. A board without enough time, the right capability or sufficient independence may miss a risk, tolerate poor performance for too long or fail to challenge an investment decision when most needed. None of those costs will appear under ‘director remuneration’ in the accounts. 

Paying more does not buy better governance either. A high fee cannot compensate for the wrong board composition, poor information, weak challenge or directors who do not contribute. What matters is what the organisation needs governance to contribute and whether the board is equipped to provide it. That contribution can be difficult to price because much of its value is preventative or long term: improving decisions before money is committed, holding a chief executive to account before poor performance becomes a crisis, and bringing experience, independence and judgement to decisions whose consequences may extend well beyond the next reporting period. When that work is done well, some of its value can be difficult to see precisely because the problem was avoided. 

Governance has a cost whether or not the director receives a fee. Someone is contributing the time, expertise and opportunity cost. The organisation’s choice is about who carries that cost and what it needs in return. 

A director fee is one part of the investment an organisation makes in having a board capable of governing it well. The question is whether the fee, the expectations of directors and the contribution the organisation needs from its board are properly aligned.