adminpay in the country has remained low despite an increase in time commitment and the pressure for improved governance standards in the wake of general macro-economic volatility.
Headhunters International managing director Mr Andrew Jemedze gave the figures at the launch of the non-executive directors’ remuneration survey in Harare yesterday.
Headhunters International has teamed up with the Institute of Directors to carry out the research that has the potential to play a critical role in determining an appropriate remuneration level for non-executive directors (NEDs) in the country.
Results of the research are expected to be out by mid-April.
“Preliminary studies show that NEDs’ remuneration is very low compared to their counterparts in the region and internationally, with most getting on average US$5 000 per annum,” he said.
In South Africa, for instance, NEDs earn between R100 000 and R200 000 per annum on average.
In Europe, on the other hand, a study by recruitment business Heidrick & Struggles last year showed that the average remuneration of NEDs had dropped to €77 000 per annum in 2010 — down 4 percent in 2009.
Non-executive directors are members of the board of directors of a company who do not form part of the executive management team, and are not employees of the company or affiliated with it in any other way.
Their responsibilities typically include: contribution to the development of strategy, scrutiny of the performance of management in meeting set objectives, managing risks, determining the appropriate levels of remuneration for executive directors, and have a key role in removing and/or appointing senior management.
These roles therefore require that NEDs be objective and are generally considered custodians of corporate governance.
Mr Jemedze said the level of remuneration of NEDs had become particularly important in view of increasing pressures on them due to a harsh economic climate.
“In the context of a global financial crisis that Zimbabwe is not immune to, there has been a lot of pressure mounting on non-executive directors in the country.
“Notable, for instance, is the length of time these directors are spending in board meetings with indications showing that the time has increased by an average 25 days in one year.
“The economy is emerging from a period of protracted hyperinflation and to this extent there are excessive risks in the present economic state, which puts a lot of pressure on NEDs,” he said.
Institute of Directors executive director Mr Edward Siwela said the survey would also assist in skills retention.
“Remuneration policy is an important element in organisational performance. Organisations need to attract and retain the right skills and for that to happen there is need to benchmark their NED remuneration with what is prevailing in the market,” he said.
The survey is also expected to assist in the development of strategies around the NED role such as performance measurement, standardisation of selection criteria, and gender parity in the appointment of NEDs among others.
Online Reporter