Overview of Board of Director Payments
One of the more difficult areas in which to make payments is to members of the board of directors, since it is difficult to determine who is to be paid which amounts. It is also not an area in which you want to make mistakes, given who is receiving the payments!Typically, a director is paid differing amounts for different services, such as:
- For attending a board meeting in person
- For attending a board meeting by phone
- For attending a committee meeting
- By type of committee meeting
- For being the chair of a committee
Given the variety of payment options and the number of directors attending different meetings, it can be difficult for the accounts payable staff to keep the payment situation straight.
How to Pay the Board of Directors
The simplest way to ensure that board members are paid is to require that signed copies of all board and committee meeting minutes be forwarded to the accounts payable staff. These copies are then used as authorization of payment, and so are retained as evidence. Thus, payments are triggered by the receipt of meeting minutes. If meeting minutes are not received, then the fault for nonpayment does not lie with the payables staff, but rather with the committee chair who should have submitted the minutes.
Further, we suggest that all directors be paid by ACH payment, rather than by check, to keep uncashed checks from cluttering up the monthly bank reconciliation.
This solution has the secondary effect of ensuring that all meetings are properly documented, which the corporate secretary will appreciate.