Life in The Boardroom 2023/24: how have non-profits adapted to the post-COVID economy?

April 25, 2024

Data for our new exclusive survey of Chairs and NEDs – Life in The Boardroom 2023/24 – were collected at the apex of the on-going cost-of-living-crisis. Non-profit-organisations (NFPs) are not shielded from the economy and perhaps feel the squeeze even more than their counterparts in the private sector. This article explores the experience of board members of NFPs in the wake of recent crisis.

We found that 76% said that their NFP competes with for-profits over experienced executives and professional staff. This represents an increase of 9% from 67% in the 2021/22 report. This is a strong majority of responses, representing a 9% increase from the 2021/22 report.

However, this may be unsurprising since one might expect hard competition from the more lucrative commercial sector. Further, this figure is not unusual historically: the average of this figure over the last four reports is 77%.

A further development is that 21% say their remuneration policy selects less experienced/skilled talent, as opposed to paying full market rates for example. This is a deviation from past reports. The average of the same figure over the last four reports is only 6%.

Some NFPs apply discounts to market rates when hiring talent, as opposed to paying full rates. One may expect these discounts to become larger in the wake of recent economic turmoil. Indeed, the discount for salary was only 20% in our latest report, compared with 27% in 2021/22. But looking at total target cash, the average discount on total target package was 22%, almost identical to 2021/22’s 23%. Further, the median figures (not shown) for both salary and target total cash are near-identical between the two most recent reports. Since this question was not asked in prior years, a longer comparison is not possible.

Comments* reflected concerns over finding adequate resources:

“Resourcing constraints at all levels are slowing down the charity’s progress”.

“NEDs at large public sector orgs should not be expected to work for free – this excludes all but the rich retired and does not help diversity”.

“NED salaries have not increased across my portfolio of roles since I became a NED. There is a lack of fair and equitable remuneration at NED level in the public sector”.

“Availability of consistent funding sources remains the biggest challenge”.

“Challenges are recruiting the best people as pay tends to be lower, and over-restrictive governance detracting from strategy sometimes”.

More data on NFPs, extensive data and analysis on the compensation, time use, opinions, and experiences of Chairs and NEDs can be found in our 80+ page report on 788 boardroom positions. Click here for a free preview.

For further discussion on this article or information on MM&K’s products and services, do not hesitate to contact James Sharp.

*edited for grammar but semantically unchanged

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