Director compensation varies considerably around the world, reflecting different director duties, legal and regulatory frameworks, and market expectations.


The United States and Canada, for example, have the highest median total non-executive director compensation, both close to US$200,000, including cash, equity, and other benefits. In both countries, directors are paid additional fees as board and committee leaders, which can increase the median to slightly more than US$300,000 in both countries. The U.S. levels are slightly higher than those in Canada and nearly half of Canadian companies pay their directors in U.S. dollars, reflecting their exposure to the U.S. market.

The United Kingdom and Ireland offer lower base fees for non-executive directors, with medians of £76,868 (US$105,000) and €70,943 (US$80,000), respectively. But in both countries, companies pay additional fees for senior independent directors and committee chairs and members, which vary by committee type and size. For example, a substantial portion of U.K.-listed companies compensate audit committee chairs with an additional £15,824 (about US$36,000) and in Ireland, the average fee paid to senior independent directors was €103,204 in total (about US$116,000).

Australia and Israel show the lowest median non-executive director compensation of the six countries surveyed, with AU$159,000 (US$118,000) and NIS67,810 (US$21,000), respectively. Australia also pays higher fees to board and deputy chairs, at AU$355,118 (US$264,000) and AU$179,930 (US$134,000), respectively. In Israel, director compensation is regulated according to company size or market capitalization—ranging from NIS67,810 (about US$21,000) to NIS110,235 (about US$34,000)—and allows higher maximum compensation for companies listed on foreign stock exchanges. However, these amounts are still much lower than those in the U.S. and Canada.


Directors of Australian and Israeli companies—and even those of the U.K. and Ireland—are often surprised by the higher levels of compensation in the United States—as well as Canada.  We suspect that reasons include the greater responsibilities and—at least for the United States— liability exposures directors face as well as the substantial expectations that shareholders and other corporate constituents have for directors.

In the U.S., directors owe fiduciary duties of care, loyalty, and good faith to the corporation and its shareholders, which require them to exercise reasonable oversight, act in the best interests of the corporation, and avoid conflicts of interest. They also must oversee the design and implementation of effective disclosure controls and procedures, internal controls over financial reporting, and compliance programs, as well as monitor the performance and compensation of senior management.

In addition, directors of U.S. companies (as well as those in Canada) must engage with various stakeholders, such as institutional investors, proxy advisors, regulators, and activists, and respond to emerging issues, such as environmental, social, and governance (“ESG”) matters, cybersecurity, and diversity. These tasks may be more demanding or frequent in the U.S. than in other countries, where the legal and regulatory regimes, the corporate governance practices, or stakeholder preferences or power may differ.

Another reason is that U.S. directors may face higher risks of liability and litigation than directors in other countries. U.S. directors are subject to federal securities laws, which impose strict disclosure obligations and potential liability for false or misleading statements or omissions. They are also subject to state corporation laws, which allow shareholders to sue directors for breach of fiduciary duty or waste of corporate assets.

One of the most prominent sources of state law liability is the Caremark doctrine, which holds directors liable for failing to exercise good faith in promoting corporate-wide systems of internal control and oversight. U.S. directors are exposed to litigation costs and distractions, even if they are ultimately exonerated, as well as reputational damage, as lawsuits against directors often attract media attention and public scrutiny. These risks may be higher in the U.S. than in other countries, where the securities laws, the corporation laws, or the judicial systems differ.

Of course, U.S. directors have some mitigations to reduce such risks and protect their interests. One is the business judgment rule, which presumes that directors act in good faith, on an informed basis, and in the best interests of the corporation, and shields them from liability for honest mistakes or errors of judgment. Another is indemnification, which allows the corporation to reimburse directors for expenses or losses incurred in connection with litigation or investigations, subject to certain limitations and conditions. A third is insurance, which provides coverage for directors against claims arising from their service as directors, subject to deductibles, exclusions, and policy limits.  

The upshot is that higher compensation for U.S. directors reflects the higher value and demand for their services, as well as the higher costs and challenges they face. U.S. directors must balance multiple and sometimes conflicting interests, navigate complex and dynamic environments, and exercise sound judgment and leadership. They also must bear significant personal and professional risks and rely on various safeguards and protections. Therefore, it is not surprising that U.S. directors are paid more than directors in other countries, where the duties, risks, and expectations differ.