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Can or should we pay a board member? It's a common question not-for-profit organisations ask our legal advice team. Only 15 per cent of board members are paid, meaning over 80 per cent of board members give their time, skills and expertise voluntarily, according to a report of the Australian Institute of Company Directors (AICD).
While there is no strict ban on paying board members (also known as committee members), there are important matters that an organisation will need to consider before deciding whether or not to pay a board member. For example, an organisation's constitution may not permit the payment of board members. Payment to a board member may also affect the volunteer nature of the relationship between the organisation and board member. The consequences of this change should be considered in detail by both the organisation and the board member before determining whether or not payment to board members is an appropriate strategy for the organisation.
Not-for-profit Law has published a new resource, Payment of board members, which covers these issues, including steps to follow if an organisation does decide to pay its board members. Check out our Governance page on the Not-for-profit Law website for our full suite of resources on the role of board members.