The compensation of board members is an issue that faces many boards. However, it is a complicated one. According to the ASAE, “Non-profits operate to achieve their missions without the motivation of financial gain.” This is an opinion held by many tax-payers and donors as well. The question that remains is, “What are the reasons to refrain from paying board members?” This article addresses four of these reasons
Decision making
I cannot find evidence that the quality of decision making improves when board members are paid. Therefore, one has to question the benefit of payment. One potential benefit might be that board members would feel more of a commitment to attend board meetings. Compensating board members may help to ensure that the work of the board proceeds uninterrupted.
Legal
Each jurisdiction has its own rules. In my jurisdiction, payment of many public sector boards is not permitted. Also, payment of directors on non-profit boards is not prohibited.
Perception
There appears to a perception that it is not appropriate to take tax-payers’ or donors’ money and use it to pay board members. There is a belief that the money should be used for programs and services. To avoid any misperceptions, many boards find it better to use money to offer professional development opportunities for their board members.
Worth
Often we hear about the crises in leadership. Would boards attract better leaders if their members were compensated for their time, effort and expertise? According to The Center for Nonprofit Management, “The growing trend is for board members to make personal financial contributions to the organization on whose board they are serving.” Many boards want to attract people who are well connected and can influence decisions in their favour.
The bottom line appears to be that persons who serve on public-sector and non-profit boards need to do so from a philosophy of “what can I give’ rather than ‘what am I going to get.’
