Directors' fees - the source of controversy at many an annual meeting - increased by 2.3 per cent to a median $45,000 in the past year, a joint report from the Institute of Directors and EY New Zealand shows.

The report showed board members are spending more time preparing for the boardroom as they grapple with an increasingly complex business environment.

Directors are spending extra time on strategy, performance, compliance and risk-oversight, Institute of Directors chief executive Kirsten Patterson said.

"Public scrutiny on performance and behaviour can be intense, and fiduciary responsibility is weighty," she said.


Patterson said the negative attitude towards the issue of directors fees was changing.

"That trend, in terms of the stakeholders and shareholders view of remuneration, is maybe softening a little as people are getting greater transparency about what the role of the board is," she said.

"It's no longer a case of the work of the board just being done in the boardroom," she told the Herald.

"They are having quite heavy workloads outside the board room now," she said.

"People see directors fees and think of them as wages or salaries, whereas of course directors fees are also there to help balance some of the risk that directors have to face," she said.

The report said directors were spending more time preparing for the boardroom, as their responsibilities and risks rose.

The report showed time spent by directors on board matters has increased from 106 hours a year in 2017 to 127 hours in 2018. This was up from 88 hours in 2014.

Seventy-nine per cent of directors surveyed attended between six to 15 board meetings a year.


Most professional non-executive directors have an average of four directorships, it said.

Patterson said directors these days were facing more legislative and regulatory requirements, including health and safety issues.

Directors must also keep on top of complex risks such as cybersecurity and climate change.

"And there is more disclosure, reporting and transparency expected on environmental and social impacts."

"For directors to lead sustainable organisations, they need to keep abreast of a range global trends and impacts including rapid technological advancement, disruptive business models and increasingly engaged stakeholders."

Only 76 per cent of organisations provided directors with liability insurance, she said.

In addition, directors have been getting to grips with the revised NZX Corporate Governance Code 2017 and the refreshed Financial Markets Authority corporate governance principles and guidelines which took effect from February 2018.

Fifty-eight per cent of non-executive directors in the sample said they were happy with what they were paid.

But in the Government administration and safety sectors, only 37.2 per cent were satisfied.

EY New Zealand Partner Una Diver said that while boards are typically good at providing oversight of financial risk, historically there has been less focus on non-financial areas.

"The report encourages boards to closely monitor how non-financial risks – including reputation and conduct – are identified, rated and remedied," she said.

The number of women non-executive director respondents increase by 4 per cent - up from 30 per cent in 2017 to 34 per cent in 2018.

Diver said there were lessons and warnings - for all directors, regardless of industry sector or geography, from the recently-released Australian Prudential Regulation Authority's report into the Commonwealth Bank of Australia.

The report represents survey data from 1546 organisations, 90 per cent of which were New Zealand-owned.

The organisations in this year's survey included 38 per cent unlisted private companies, 17 per cent listed private companies and 21 per cent not-for-profit organisations.