Video:

Corporate governance issues – Clearly defining remuneration

Author: Rob Wirszycz, James Kirk (yBC.tv)

Categories: Business Strategy, Director's Remuneration, Financial Reporting, Governance
Tags: board meetings, CEO, decision making, non-executive director, remuneration, retainers
Corporate governance issues arising from boardroom structure includes how much each member should be paid for what they are expected to do, as Rob Wirszycz discusses in this TV show.

Corporate governance issues - Defining roles

Remuneration is a really sticky area in a sense.  Actually, if I’m a Non-Executive Director I don’t expect to own any shares.  My belief is that a Non-Executive Director is there to be completely objective.  And I’ve been in many Board meetings where effectively the Board meeting is a meeting of the shareholders.  Self-interest always wins in those meetings.  So if I’m a Non-Executive Director in a meeting and I’m there, my job, I’ll accept a retain, a relatively small retainer, depending on what they want me to do.  If they do anything away, outside of the brief, my belief is that that should be paid for separately.  But so just to be a Non-Executive Director, I would like to be paid for the very clear, clearly-defined, but I don’t want, expect any shares. As a Chairman it’s different.  Now the Chairman, I’m acting on behalf of the shareholders, so I actually have to have alignment with them, so what I always ask for when I’m Chairman is again a retainer, which is a small amount of money, relatively small amount of money, but I want to be able to earn shares based on the achievement of the plan.  So if we achieve the plan, which I’m owning, then I believe that I should be aligned with the shareholders’ interests and I should be able to earn in shares into the business.

If you are interested corporate governance issues take a look at our briefings on director's remuneration and board effectiveness.

 
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