But as any shareholder in a company whose fortunes have been undermined by managerial shortcomings knows all too well, that maxim isn’t always true. And while the focus of investor antipathy in such cases generally is aimed at the CEO or CFO, the failure to provide qualified oversight by the less-visible board of directors also can be responsible.
Whatever their complicity, board members are generously compensated, especially at large, for-profit businesses. According to the latest survey of director compensation at 260 of the Fortune 500 companies, the median annual compensation for outside board members is $246,250. For that tidy sum, directors are hardly required to break a sweat.
The executive search firm Korn/Ferry reportedly found that outside directors generally work from 250 to 300 hours per year, or about 5.3 hours per week. At that less than exhausting pace, board compensation is nearly $900 per hour.
Nice “work” if you can get it.