A board member's cost: economics for organizational leaders.
Board members for an enterprise are compensated for their time and expertise. It is an expected cost for oversight. The balance point is to compensate fairly enough to capture a board member's complete attention. Too little and the type of board member you want is not going to be available or interested. Too much and board members become sorely tempted to preserve their board seats for the sake of the money. Establishing policy for how board compensation is determined becomes important. Biogen Idec does it through a board subcommittee. Other companies draw on consultative expertise to establish board compensation that ties to company performance, and not just a wage for time served.