The release of the Myners Review highlights the need for professional directors. But do they make a difference to profitability and how much extra will they cost?
In his interim review into governance at the Co-operative Group, Lord Myners says the majority of directors on a new board for the organisation should have the “skills and experience” of non-executive directors sitting on the boards of its competitors.
Co-operative News has looked into and analysed different pay ratios of non-executive directors of large UK co-operatives in agriculture and retail alongside plcs.
How we did it: the methodology
This investigation into director pay was achieved by analysing annual reports. Mary Patel looked at the UK’s 25 largest co-operatives and found figures on 17, while Giles Simon provides written analysis.
Six of these co-operatives are in agriculture, while nine are consumer-owned. To make comparisons, a snapshot of figures for comparably sized plcs in both retail and agriculture were also analysed.
For each business, the remuneration of its non-executive directors over the last three years were identified. The figure used in our analysis refers to the median level of remuneration received by an individual non-executive director in one year. Some individuals will receive higher pay because they take on additional roles in committees, while others receive the basic remuneration because they do not take on these roles.
For retail co-operatives, the non-executive directors are primarily customer members. For agricultural co-operatives, non-executive directors are a mix of farmer members and independently appointed directors.