At present governors in most universities and colleges are not paid (although expenses are usually claimed). As the workload on governors increases and as more lay member positions on public bodies attract payment or an honorarium, the fact that higher education institutions do not generally pay fees to board members may stand in the way of attracting the best candidates. It may also be a deterrent in increasing the diversity of board membership.
What is clear is that - if widely introduced - remuneration would almost inevitably change the nature of governance, and that the 'value added' of the governing body would be much more closely examined. A governing body considering the benefits and drawbacks of payment must not, therefore, assume that it is just a question of offering payment and that everything else will stay the same; rather possible payment needs to be seen as an outcome of a particular approach to governance that an institution may want to adopt.
A number of institutions are considering remuneration for their governors. Several have obtained the powers to do so, but have not put them into effect. Leeds Metropolitan University did introduce a system of payment for lay members, with higher rates for the Chair and committee chairs, but has now decided not to continue with it.
The CUC have drawn up guidance (Word, 53kb) which provides more details of the issues relating to payment, and the Charity Commission booklet CC11 Trustee Expenses and Payments sets out the key issues for trustees. Governing body remuneration was the issue for consideration at the 1 July 2010 HE Governance Forum. A summary report sets out the issues and the views of those attending.
Following the financial crisis and the publication of the Walker Report, there are indications that private sector companies are increasing the remuneration of non-executive directors to reflect their increasing responsibilities and risks.
Powerpoint presentations:
The Benefits and Drawbacks of Remuneration of Governing Body Members, Alan Howarth