Pay for NEDs is the bogeyman in the room for FE colleges

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In contrast to the FE sector, where only a handful of colleges pay the Chair, NHS Trusts pay NEDS.  We asked Gillian Norton, Chair of two NHS Trusts, to share her experience of the impact pay has on NHS boards, in particular on motivation to become a NED, accountability and affordability.

It’s important to be clear about what we mean by “pay” when we talk about paying NEDS in the context of NHS Trusts.  They are responsible for the effective governance of vast organisations with substantial budgets, that operate within complex regulatory and policy frameworks, and that have a significant impact on people’s lives.

Motivation 

The size and scope of the role require people with a certain depth of experience.  The “pay” they receive is not commensurate with their experience or the impact of their contribution. It’s a token recognition of the time they dedicate to the role, their skills, and the risk and responsibility they carry.      

None of the NEDs that I work with was attracted to the role by the pay.  All care passionately about the NHS and want to give back to a local service, often choosing a hospital that holds a special place in their heart.  However, pay does serve several valuable functions.     

Accountability 

It protects the time of the chair and board members by creating an informal sense of obligation on both sides. Time is money and pay helps to create a healthy respect for all that call on it. Similarly, it creates clearer boundaries around time commitments than might be the case with a voluntary role.      

Pay enables me to look at board performance in a more strategic manner. I can be specific about the skills and experience we need, set clear responsibilities, and evaluate individual and board performance on an annual basis. It means I can appoint the people we need rather than doing the best job we can with willing volunteers. Without it, we might lose talented applicants to other sectors that do pay, in particular, charities that deliver health services. Given the sheer complexity of new regulations and risk to personal reputation this presents, I’m not convinced many people would accept the statutory responsibilities of the role if it were not paid.       

Pay doesn’t blur the lines of accountability as some fear. We operate as a unitary board, Executive and Non-Executive Directors make decisions as a single group, while respecting the clear lines of responsibility of each role.

I think the argument that pay supports board diversity is overplayed, certainly within the context of NHS Trusts. To operate in such a complex environment, applicants need to be educated to a particular level and come with a depth of professional experience. The answer lies in measures to develop a sustainable pipeline of applicants from diverse backgrounds, growing the experience they need to equip them for a NED role, and working with a recruitment partner to create a shortlist of diverse candidates.        

Affordability 

I’m conscious that payment of board members is frequently called into question by sectors subject to funding cuts. In my experience, the cost of paying the board is tiny compared to the £850 million turnover it is responsible for, and the value it creates. Pay continues to be a constructive tool for NHS boards but on its own isn’t sufficient to attract the right calibre of candidates.      

Gillian Norton, Chair St George’s University Hospitals NHS Trust and Chair of Espsom and St Helier University Hospitals NHS Trust        


It’s clear from Gillian’s insightful commentary that, as Chair of two NHS Trusts, remuneration is an important element in providing sound and effective governance. Of course, there are differences to the NHS and further education and a one-size-fits-all is not necessarily the answer. With a number of FE Chair appointments being transitioned through the Charity Commission, FE is slowly moving in that direction. With larger College Groups forming, greater complexity and increased scrutiny and accountability, it feels that the question of remuneration should be further considered. Guiding organisations through landscape will remain a challenge for even the most resilient of boards and not ensuring that the College has a high performing board ultimately lets down the learners, staff and employers.       

At GatenbySanderson, our purpose is to find and develop leaders that shape a better society. We are the UK’s largest specialist talent consultancy focused on the public, not for profit sector and related commercial sectors. Building more inclusive and representative leadership is part of our DNA. We have always championed under-represented groups and over 60% of our appointees are diverse groups.  – women make up 55%* of our senior appointments, Black, Asian and other minority ethnic leaders in senior Executive and Non-Executive roles make up 13% of all appointees, the LGBTQ+ community 9% and those with a disability 8%. The increasing recognition of the benefits that diverse boards and executive teams bring aligned with the need to build more inclusive cultures requires intelligent and experienced search to deliver sustained outcomes.         

Within our Leadership and Talent Consultancy, we have a dedicated team of learning and development specialists who lead on the design and delivery of our leadership development modular programmes, our manager and future leader programmes, our board evaluation and development projects as well as our organisational transformation initiatives. We also then have an extended leadership faculty that are spread nationally to meet our client and sector needs.       

If you are in need of talent, either on an interim or permanent basis, we are in a position to help. If you wish to discuss any of the above or potentially other levels of support for your senior teams or Board then please do get in touch.       

Paul Aristides Partner, Further Education and Skills

paul.aristides@gatenbysanderson.com