Director Time for Value Added?

At an Australian Institute of Company Directors (AICD) luncheon in Sydney on May 16 David Beatty OBE, a well regarded Canadian governance leader, cited interesting research.  It indicated that of the time Canadian directors dedicated to a board, over 70% was for routine and oversight matters, while less than 30% was spent on value adding activities of talent and strategy.  This is in accord with similar proportions we see in Australia.

Guerdon Associates trusts that the remuneration work we do for boards falls more in the value adding “talent” side of board activities, as opposed to the non value adding “oversight” activities.  In reality, we expect it is a bit of both.  At Guerdon Associates we have recognised this, and are working on ways to reduce the “oversight” component of time spent on board and executive remuneration by directors, while ensuring directors are still well advised to meet their duty of care requirement.  At the same time, we are working on the value adding side.  Soon, we hope to have enough data based on our own work to benchmark time spent by the nomination and remuneration committee on routine versus value adding time.  While we have not yet compiled all the data available, we should be able to provide a guideline benchmark for most nomination and remuneration committees for value added vs. routine and oversight time, depending on the availability of certain other criteria. 

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