How Much Board of Directors Members in GCC Get Paid and What They Do?
Discover how much Board of Directors (BOD) members in the GCC get paid and explore the trends in Board Composition. Learn what BOD members do and how their roles impact company governance
As businesses evolve, expand, and face complex challenges in a rapidly changing global market, the role of the Board of Directors (BOD) has become increasingly crucial, especially in the GCC (Gulf Cooperation Council) countries.
These executives oversee the financial health of organizations and the company’s strategic direction, ensure compliance with local regulations, and make key decisions. Therefore, boards’ composition and compensation are important factors in driving business success.
This article explores the current trends in BOD remuneration across the GCC region and examines what the BOD members do and how much they get paid.
BOD Remuneration in the GCC: How Much Do They Get Paid?
The compensation for board members varies widely across the GCC, depending on the company its sector, and its size. Based on the Pro-Capita Annual Report 2023-2024 on GCC HR Trends and Practices, BOD members in the region earn competitive fees, with noticeable variation between public and private companies, as well as across different GCC countries.
Average Remuneration Across GCC Countries
In terms of BOD remuneration, the report states that:
● Among the highest-paying countries for BOD members are the UAE and Saudi Arabia, with their average annual compensations ranging from USD 30,000 to USD 100,000 for non-executive directors.
● For Kuwait and Qatar, BOD remuneration is generally lower, with their annual pay for non-executive members averaging USD 20,000 to USD 50,000.
● Bahrain and Oman fall in the middle range, with their average pay for board members ranging from USD 25,000 to USD 65,000.
It’s crucial to note that these figures typically do not include additional perks like stock options, travel allowances, and other benefits. Executive directors earn notably more than non-executive directors, considering their involvement in day-to-day operations and increased responsibilities.
What Does the Board of Directors Do?
Just like their counterparts globally, the key responsibilities of BOD members in the GCC are to oversee corporate strategy, protect shareholders’ interests, manage risks, and ensure legal compliance. Members also work to ensure the company practices good governance and maintains ethical standards.
● Strategic Oversight: The BOD members work closely with the executive team and the CEO to define the company’s long-term strategy and ensure the company is adapting to changing market conditions. They guide key decisions related to acquisitions, investments, and capital allocation.
● Risk Management: Directors are responsible for assessing the risks facing the company and ensuring there are effective mechanisms in place to mitigate them. It includes both financial and non-financial risks like operational or reputational risks.
● Financial Oversight: One of the board’s most crucial duties is overseeing the company’s financial health. It includes reviewing financial statements, approving budgets, and ensuring the accuracy and transparency of financial reporting.
● Corporate Governance: Another crucial part of a BOD member’s role is ensuring the company adheres to corporate governance standards and regulatory frameworks. It includes auditing practices, reviewing financial statements, and ensuring transparency in reporting.
The role of the BOD is so crucial that organizations in the GCC are required by law to have a board with a discrete composition to ensure proper governance. The composition typically includes independent directors, executive directors, and non-executive directors.
Board Composition Trends in the GCC
The composition of boards in the GCC has evolved significantly over the last decade. The recent changes have emphasized diversifying board membership in terms of expertise, gender, and experience. According to the 2023-2024 GCC HR Trends and Practices report, there is a notable shift towards more diverse boards, with an increasing number of women being appointed to senior positions.
The female representation on boards in the GCC currently remains low but is improving. For instance, there is a marked increase in the number of women in leadership roles in Saudi Arabia, fueled by the Vision 2030 reform plan. Qatar and the UAE also encourage diversity by making strides, with several companies introducing quotas for female board members.
Regarding professional background, boards are increasingly concentrated by individuals with technology, international business, and sustainability expertise. This trend reflects the growing demand for boards to navigate the complexities of technological disruptions and global markets.
Final Thoughts
The role of the BOD members in the GCC is evolving, with a noticeable increase in compensation reflecting the growing demands of strategic direction, corporate governance, and financial oversight.
As the businesses expand and face new challenges, the remuneration packages for the board members continue to increase, especially in larger companies. Simultaneously, the trend toward more diverse board compositions ensures that businesses are better equipped to address the complexities of the modern global economy.
The 2023-2024 GCC HR Trends and Practices report highlights these ongoing developments, underscoring the importance of strong, well-compensated boards in fostering long-term success.
