Board members often enjoy benefits that aren’t always available to the general population or workforce. What types of benefits these might be will depend on the organizational structure, such as whether it’s a public company or a nonprofit, as well as other factors.
Benefits offered will also vary from corporation to corporation and according to what the individual brings to the table.
If you are a high-profile executive or have recently retired from a similar role, consider being a part of the board of directors in different corporations. This can be a financially rewarding side gig or another career path.
Following a successful board nomination process, you can be paid a handsome amount while enjoying a less stressful and time-consuming position compared to the previous positions you held. According to a Lodestone Global Study, the average 2021 salary for a board of directors member of a private company was $44,850.
This is just the average compensation–there are instances where one can easily earn $300,000 to $500,000 per year as a board member. The most lucrative board opportunities are in S&P 500 companies. As per Reuters, the average compensation for these positions was $304,856 in 2018. In the case of non-profit companies, board members get paid nothing except meeting fees and travel expenses.
Sitting on a company's board can also be a lucrative opportunity for retired high-level executives.
If a company hires outside directors, they’re paid for their services to the board. When it comes to inside directors, they are primarily C-suite level executives who don't get any additional compensation for serving on the board.
The benefits a member receives depends on the company's structure and complexity, and whether it's a private or a public company. It also depends on the number of meetings members will attend and the other responsibilities associated with the position. Usually, board members are responsible for preparing and attending board meetings, they also must review company materials and filings. As board members, they act as advisors to the company on multiple matters such as strategy, the overall direction of the company, succession, acquisitions, etc.
The core responsibility of board members is to represent the shareholders. It's their primary duty to manage or analyze the corporation's management and strategy. They assess the company's overall performance and act as a consultant for management.
When it comes to board meetings, usually four to six are held throughout the year—but the number of meetings can vary depending on the company. Typically, all board directors attend these meetings. If there is a crisis situation, board members may have to work more hours. In addition, board members may be asked to attend committee meetings, such as audit committee meetings before public filings or compensation meetings, to discuss bonuses and compensation packages.
Being a board member can be a very lucrative opportunity for CEOs and entrepreneurs. For them, it's not necessarily the money or other perks that matter–it is an opportunity for them to improve their leadership and networking skills.
When serving as a board member for a company, you can learn a lot about how it handles challenges, weighs and mitigates risks, and performs certain tasks. Working on a board lets you learn about the business model and allows you to determine the characteristics and values you admire and implement them in your own company.
Being a sitting member on the board of different companies adds a lot of credibility and prestige to a personal brand. It can further translate into good investment and business partnership opportunities in the future.
Outsider board members bring fresh perspectives and diverse experiences to an organization. On the other hand, it’s highly lucrative for high-profile executives and entrepreneurs because of the handsome compensation and growth opportunities.
Looking for more information on board members versus board observers or how to write a board nomination letter? Take a look at our recent articles.
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