Is There a Growing Need to Remunerate Non-Executive Directors and Board Trustees?

For many years, serving as a Non-Executive Director (NED) or Board Trustee was regarded as a voluntary act of public service. The commitment often meant little more than attending a handful of board meetings each year, providing strategic oversight, and offering advice when called upon.

Those days are gone.

Today’s non-executive roles come with serious responsibility — overseeing governance, managing risk, ensuring compliance, and engaging with increasingly complex stakeholder expectations. As the demands rise, one question is gaining traction across both the corporate and not-for-profit sectors:

Should NEDs and Trustees be remunerated?

Why This Debate Is Emerging

The argument for payment is becoming harder to ignore, driven by several key factors:

1. Rising Governance and Compliance Demands

Non-executives are legally accountable for organisational decisions. Failures in governance can lead to financial, reputational, and even personal consequences.

2. Time Commitment

Gone are the days of “four meetings a year.” Modern NEDs and Trustees often commit significant time to preparation, committee work, strategy sessions, and ad-hoc risk matters — often far beyond what was once expected ¹.

3. Technical and Professional Expertise

Boards increasingly seek individuals with deep specialist skills — in finance, risk, law, digital transformation, ESG, or international markets — along with a strategic mindset and professional connections. These aren’t ceremonial positions; they require active, “live world” contribution and judgement.

4. Recruitment Challenges

The calibre of individuals organisations now need may hesitate to take on such demanding, high-risk roles without remuneration recognising their contribution.

5. Strengthened Accountability

Paying NEDs or Trustees can actually enhance governance. With remuneration comes clarity of expectation, accountability, and often performance review.

What NEDs Are Paid

Recent data highlights just how professionalised these roles have become:

• Average UK NED fees (2024): ~£78,000 per year.

• Average FTSE Chair fee: £441,000 per year ².

• Across the FTSE All-Share, median NED base fees rose by 3% in 2024, with additional payments increasingly common for committee roles ³.

• In large private companies, fees are typically £20,000–£50,000 per year ⁴.

In the charity sector, the default remains voluntary service. Yet some larger or more complex organisations now pay Trustees for key positions — typically £5,000–£15,000 annually — where workload, risk and professional expertise justify it ⁵.

Why Some Decline These Roles

Despite the prestige, many people turn down non-executive or trustee appointments due to:

• Increased personal liability and reputational risk.

• Time pressures alongside executive commitments.

• Opportunity cost, especially for consultants or professionals in private practice.

• A sense that unpaid roles undervalue the expertise required.

Remuneration may not remove these barriers, but it helps address them — signalling that the role is valued and expectations are professional.

Charities and the Question of Independence

In the charitable sector, paying Trustees has traditionally been avoided to preserve independence and public confidence. However, the Charity Commission’s updated guidance (April 2025) now provides a clear framework: payment can be made where there is proper authority (via the governing document or Commission approval) and where it demonstrably benefits the charity ⁶.

Critics argue that remuneration risks undermining independence. Yet independence doesn’t come from the absence of pay — it comes from good governance, transparency and integrity. Public officials such as councillors and MPs are paid, yet are still expected to act independently. The same principle applies here.

In fact, for complex or high-risk charities, remuneration can strengthen governance by attracting Trustees with the expertise and time commitment the role requires.

Barriers to Paying NEDs and Trustees

Cost is often cited as the key barrier, particularly for smaller organisations. But focusing on cost alone risks missing the wider point: fair remuneration can be a sound investment in governance quality, performance, and risk management.

In sectors where the cost of poor oversight can be measured in millions — or in reputational damage — the value of experienced, engaged non-executives far outweighs their fee.

Towards a Balanced Approach

The question isn’t whether NEDs and Trustees should be paid, but rather:

• What level of responsibility and risk does the role involve?

• What calibre of individual are we seeking to attract?

• How can remuneration be structured transparently and fairly?

  
  

Best practice includes:

• Benchmarking against market norms.

• Linking fees to clear role definitions and time commitments.

• Differentiating fees for committee chairs or specialist roles.

• Reporting payments transparently in annual reports.

• Reviewing remuneration regularly.

  
  

Conclusion

Governance today is more complex, accountable, and time-intensive than ever. Organisations now need non-executive leaders who bring technical expertise, strategic insight, and professional connections — people who operate in the real world, not simply in the boardroom.

If we want to attract and retain that calibre of talent, it may be time to normalise fair remuneration for NEDs and Trustees — not as a privilege, but as recognition of their vital role in safeguarding organisations and public trust.

Footnotes

1. Spencer Stuart, UK Board Index 2024 – analysis of board workload and time commitments. ↩

2. Alvarez & Marsal, FTSE 350 NED Fee Survey 2024. ↩

3. Trust Associates, UK NED Fee Trends Report 2024. ↩

4. KPMG, Private Company NED Remuneration Benchmarking Guide 2023/24. ↩

5. Association of Chairs, Trustee Payments in Practice (2024). ↩

6. Charity Commission for England & Wales, CC11: Trustee Expenses and Payments (updated April 2025). ↩