UK companies are expecting increasing amounts of time from their non-executive directors (NEDs), a new report has found.
The average NED’s time commitment has risen from 15 days in 2003 to 20 days in 2007, according to PricewaterhouseCoopers’ (PWC) annual guide on practice and fees.
Pay increased by 6% last year although PWC said this was a slower rate than in recent history. Companies are also observing the value of NEDs more closely, the report claims, with 75% of firms using some kind of effectiveness monitoring.
“Results suggest that the rate of fee increases has slowed while the duties expected of NEDs continues to increase,” said Sean O’Hare, partner at PWC.
“The role of the chair of the remuneration committee is widely understood to be becoming more onerous and it will be interesting to see if this increases in future years.”
More than 60% of firms now have a formal induction procedure in place for non-executives, and half have a special NED training programme.
The report also found that more than a quarter (27%) of companies encourage their executives to be members of other boards as it is seen as beneficial to the firm in terms of business opportunities and contracts.
Only 9% discouraged outside directorships on the grounds of not wanting NEDs to spend time on another company’s affairs.
© Crimson Business Ltd. 2007
