KARACHI: The remuneration of non-executive directors for attending Board of Director meetings of companies is not even across the board.

The family-owned group companies are tight-fisted and pay nothing or a token sum in meeting fees as the directors are often the members of families that have controlling stakes in those companies, a survey by Dawn indicates.

Most listed companies disburse between Rs20,000 to Rs100,000 as fees for attending a single meeting, which makes a tidy package of around Rs 2,50,000 for an average of five mandatory meetings held by the Board in a year.

But that is not something that other corporate bosses would eye with envy or jealousy.

A random case that came to view the other day was an item on the agenda of Security Papers Limited Annual general meeting (AGM) to be held on Aug 28, 2015 to approve resolution to increase directors’ remuneration for attending meeting of the Board/Committees to Rs160,000 from Rs95,000.

The National Bank of Pakistan enhanced the fee of non-executive directors for a Board meeting to Rs150,000, plus hotel and travelling allowance, effective Jan 1, 2015.

There are many other instances of payments that touch Rs1 million a year. But if this sounds steep, consider the sum paid to each director for participating in a single meeting of a foreign bank in Pakistan owned by the Abu Dhabi group: a cool sum of $10,000.

For the mandatory five board meetings the aggregate sum would work up to $50,000, which converted into local currency would be a staggering Rs5m.

Another subsidiary of the Bahrain-based bank writes a cheque for about the same amount for directors’ attending board meetings. And that does not include the actual disbursements of hotel and travelling bills.

While it is mandatory for listed companies to disclose ‘remuneration paid to directors and executives’ in their annual reports; there is no compulsion to disclose the meeting fees.

Companies and banks, who hand down a fat cheque in fees to directors, go to great lengths in concealing the amount.

Mostly the sum does not form a part of the annual report and a separate sheet marked as “special business” is sent to the shareholders at their registered addresses. Such corporates and banks take advantage of Section 160 (1) (b) of the Companies Ordinance that permits “annexation” of such statement with notice of AGM.

Some companies lump the sum with “administrative expenses” in the accounts while others simply refer to notes to the accounts, which for a shareholder with little or no knowledge of deciphering financial figures, would be difficult to locate.

In the absence of shareholders’ activism, questions are rarely raised on the directors meeting fees at the company AGMs.

So are the corporate fat cats licking a good deal of milk and honey from yet another source besides fat pay packages?

A former president of a local bank replied that it would be unfair to call even the heavier meeting fees as the “the directors’ cut”. “Highly seasoned and reputable people who lend or rent their time and reputation to the board as non-executive directors deserve to be fairly remunerated,” he reckoned.

Another company secretary affirmed: “Non-executive directors are paid to accept fiduciary responsibilities”.

Even the stock exchanges now pay Rs50,000 to a director for attending a Board meeting.

Several years ago when it offered nothing, reputable persons with knowledge and skills declined the regulators’ request to accept the post of non-member directors.

But for all that, it is difficult to deny that holding a seat on the board is a lucrative affair and many former chairman and CEO of large firms are known to clamour for entry into the corporate board rooms of as many high-fees paying big companies as possible.

Published in Dawn, August 9th, 2015

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