- Title page
- Purpose of this guidance
- Who is this guidance for
- How to use this guidance
- Chapter 1: Relevant legislation
- Chapter 2: Functions and powers of the entity
- Chapter 3: Key relationships
- Chapter 4: Collective duties of the board and individual duties of board members
- Chapter 5: Role of the board chair
- Chapter 6: General responsibilities of members
- Chapter 7: Members' interests and conflicts: identification, disclosure and management
- Chapter 8: Disclosure of information
- Chapter 9: Gifts and hospitality
- Chapter 10: Board meeting procedures
- Chapter 11: Board committees
- Chapter 12: Delegations
- Chapter 13: Crown entities as employers
- Chapter 14: Subsidiaries
- Chapter 15: Planning and reporting
- Chapter 16: Board and member performance evaluation
- Chapter 17: Board appointments and reappointment
- Chapter 18: Remuneration and expenses for board members
- Chapter 19: Liability and protection from legal claims or proceedings
- Summary of minimum content for a governance manual by chapter
Chapter 18: Remuneration and expenses for board members
Setting fee levels that are sufficient to attract and retain talented board members is an important element of effective governance. Members do not set their own fees, remuneration and allowances but boards should understand how these are set and how to engage with the relevant fee setting authority when fees are reviewed. For further advice regarding the Cabinet Fees Framework, please email firstname.lastname@example.org.
Sections 47 and 48 of the Crown Entities Act 2004 (CE Act) provide two different mechanisms for setting the remuneration and expenses of board members:
- Crown agents and Autonomous Crown Entity (ACE) members' remuneration and expenses are set by the responsible Minister under the Cabinet Fees Framework. The Framework is contained in Cabinet Office circular CO (12) 6 (www.dpmc.govt.nz/cabinet/circulars/co12/6). The Framework is reviewed periodically, so entities need to be sure they are working from the latest version.
- Independent Crown Entity (ICE) members' remuneration and expenses are set by the Remuneration Authority under the Remuneration Authority Act 1977. The role of the Remuneration Authority in setting remuneration is set out in Cabinet Office circular CO (11) 7 (www.dpmc.govt.nz/cabinet/circulars/co11/7).
When a Crown entity board (including an ICE) establishes a committee or a subsidiary, the board itself becomes the fee-setting authority and should then follow the provisions in the Fees Framework.
- Board chairs are paid more than other members in recognition of their more substantial role.
- Deputy chairs and those members who chair committees are paid an additional amount on top of their member fee.
- Members who receive an annual fee for board membership do not generally receive additional payment if they are a member of a board's committee; although there may be exceptions in other legislation. Members who receive a daily fee for board activities can, however, be paid for additional days spent on committee work.
- The annual fees paid to members of governance boards are based on an assumed workload of 50 days for chairs and 30 days for members.
- Independent members of board committees (ie, those who are not on the entity board) may be paid a fee, up to a maximum of the daily equivalent of the full member fee. The total annual fee paid to an independent member of a sub-committee should not exceed 50% of the total annual fee paid to a member of the entity board. The Auditor-General suggests the fee should be at a level that reflects the time it takes to properly carry out their duties.
- Board members should not be paid when they have not attended a meeting.