Comments on: What are Board Members Being Paid in the Microfinance Industry? http://cfi-blog.org/2012/05/22/what-are-board-members-being-paid-in-the-microfinance-industry/ Sun, 13 Jul 2014 11:01:05 +0000 hourly 1 http://wordpress.com/ By: Danielle Donza http://cfi-blog.org/2012/05/22/what-are-board-members-being-paid-in-the-microfinance-industry/#comment-4296 Tue, 29 May 2012 18:38:36 +0000 http://centerforfinancialinclusionblog.wordpress.com/?p=6649#comment-4296 Thank you for your comment. You make an excellent point about the time value of money and also about the need to widen the candidate pool. It would be great to see further work be done in the industry to increase transparency around board remuneration.

]]> By: OnePlanetCEO http://cfi-blog.org/2012/05/22/what-are-board-members-being-paid-in-the-microfinance-industry/#comment-4209 Tue, 22 May 2012 20:57:21 +0000 http://centerforfinancialinclusionblog.wordpress.com/?p=6649#comment-4209 I think it is a positive trend that MFIs are compensating directors and that some even recognize committee work. I know too many MFIs that believe the honor of serving on their Board is enough. The result limits the candidate pool to retirees, the wealthy and those who want the prestige but may or may not make the necessary time available for uncompensated work.

Time has a monetary value. That’s part of why microfinance works – move the bank function closer to the clients and the real, often steep opportunity cost of finance is reduced or eliminated. Board member time has value too. Some of that value is potentially compensated by reputational enhancement, but many strong potential Board candidates can’t afford to devote significant time to activities that don’t provide a financial return as well.

As Danielle points out, if MFIs want top notch Board members who are fully engaged and add serious value, they need to design effective and appropriate Board compensation policies.

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