Not-for-profit director remuneration guide: Considerations for boards

A structured approach to board consideration of NFP director remuneration

The question of whether directors of not-for-profit (NFP) organisations should be remunerated is a complex and often sensitive issue. For many NFPs and charities, volunteer governance remains central to identity and purpose. For others, particularly larger and more complex organisations, some boards are examining whether traditional governance models remain sustainable in a changing operating environment. These pressures are evident in particular sectors and industries, notably organisations delivering care and human services.  

The guide does not advocate for NFP director remuneration. Rather, it provides a structured, principles-based framework to support thoughtful, ethical and transparent decision-making. 

It provides a structured five-step approach, moving from initial threshold questions through due diligence and stakeholder consultation to a final decision and, where appropriate, implementation. It covers legal, governance, financial, stakeholder and reputational considerations. 

Drawing on consultation with directors, regulators, legal experts and sector leaders, the guide also includes practical case studies from organisations that have considered director remuneration in different contexts. Importantly, it recognises that, for many organisations, the appropriate conclusion may be that remuneration is not necessary or in the organisation’s best interests.