Increasingly onerous corporate governance requirements have given a big boost to the fees paid to the non-executive directors in the UK's largest companies, with some earning almost £100,000 for 25 days work.
Figures from Incomes Data Services (IDS) show that the average fees paid to non-executive directors (NEDs) in FTSE 350 companies have risen to £40,000, with those at FTSE 100 companies earning an average £48,800, an increase of 14 per cent on last year. This is on top of a rise of more than 21 per cent between 2004 and 2005.
The rise appears largely due to the increasing reluctance of individuals to become non-executives, with many suitable candidates believing that the job has become too risky, too high profile and too time consuming.
Research carried out in 2005 by Ernst and Young found that NEDs are less likely to accept a non-executive position than they were a year ago, while half said that they were less likely to accept the chairmanship of a company's audit commission because of the role's growing corporate governance requirements.
As one non-exec told Ernst & Young: "The challenge to find excellent non-execs is real and will get worse over the next five years, particularly as the pool of existing FTSE non-executives is gradually withdrawing from their appointments or retiring."
This sentiment was confirmed by a March 2006 survey by executive recruitment group Korn/Ferry International which found that companies are struggling to find directors prepared to step into board positions because of growing fears about the risks and problems they might encounter.
Steve Tatton, editor of the IDS Executive Compensation Review, said that the days when becoming a non-exec was a sinecure for people with titles are fast disappearing.
"Now it is becoming a distinctly well-paid job, although one that carries a lot more responsibility and legal risk."
The best paid non-execs are those serving on the board of the troubled mobile communications giant, Vodafone, who earn £95,000. Other notable fee increases were at banking group at HSBC, where IDS said that non-executives enjoyed an 18 per cent rise to £65,000.