An investigation on the hard work done by non executives in the face of accusations that they are merely making easy money.

As Tony Blair racks up the air miles (carbon offset one assumes) on his current farewell tour of the world one wonders what lies in store for him next. No doubt he will probably occupy his time dictat-ing his memoirs,  competing with Cherie to see how much he can command for speaking tours, and accepting a couple of non-executive roles on the board of prestigious companies.

A comparison is often drawn between the roles of Prime Minister and corporation CEO along the lines that running a country is just like running a business. Any simi-larities quickly disappear though when you look at life after PM/CEO.

How many hotel company CEOs do you see conducting a farewell visit to all their properties, or being feted around the world as they embark on lucrative speaking engagements or book signings? Those CEOs with no intent on taking another executive position quickly drop out of the limelight. In one area however the CEO and the former PM do share an interest and that is in sitting on the board of public companies.

Traditionally a non-executive board role was regarded by the cynical as a ‘cushy number', a just reward for all those years of hard service in the front line. Commitments of the position seemed to rarely entail much more than a quarterly board meeting followed by a long lunch, a few document signings, and the occasional attendance at events to lend an air of credibility and gravitas. With two or three such board obligations, a non-exec could make a decent living and keep himself comfortably busy but not "too busy".

That was then of course, in a world when nobody had even heard the words ‘corporate governance' and this is now – a world where the life of a public company, and in turn of its directors, is consider-ably more arduous.  Today non-executive directors are expected to have a much greater influence on the running of a company, to contribute greater expertise, to represent and protect the interests of shareholders, and to be not only responsible but also accountable.

It all sounds like a lot of hard work so who would still want to be a non-exec? Indeed, in the UK since publication of the Higgs Review's recommendation on board practices, the demand for non-executive directors has grown tremendously.

Unfortunately the pool of qualified or interested candidates has not kept pace and companies are now forced to look further afield for their non-executive directors, for example to the public sector.

Cleary however some hoteliers relish the chal-lenge once they have vacated the CEO seat. Sir David Michels, for example, when speaking after the HHC acquisition of Hilton International stated to Dominic Walsh in The Times, "I don't think I'd ever do an executive job again but I'd still want to work 80 hours a week. . . There are two plc boards I'd like to get on."

Michels has lived up to his word currently holding non-exec positions on the boards of easyJet, Marks & Spencer,  Strategic Hotels and Resorts, and Vector Hospitality Reit. He must be working those 80 hours, if not more. David Thomas, formerly of Whitbread, is a non-exec director of Xansa, and Richard North, former CEO of Inter-Continental, takes over this month as chairman of Woolworths Group.

In line with the increased workload, directors' fees have increased significantly over the past few years, and at a much higher rate than executive pay. In 2004 the average earnings for a FTSE100 non-executive chairman stood at just over ï¿¡200,000 per annum. A typical FTSE100 chairman works on average 100 days per year.

If we take a look at the 2006 Annual Reports of three major publicly listed UK hotel companies, Hilton International (pre-acquisition), InterCon-tinental and Whitbread, we note that chairman pay went up by 40% over a period of two years.

These fees continue to escalate considerably above inflation. As of 2007 InterContinental's chairman receives ï¿¡390,000 annually and Whitbread's chair-man's fee has risen to ï¿¡250,000.

The 2004 and 2006 annual reports of the same companies demonstrate how non-executive direc-tors' fees rose during that time frame.

In addition to higher base fees for non-exec direc-tors, boards have also recognised the extra burden of work encountered by those who chair the audit, nomination, and remuneration committees, as well as by those who hold the position of senior inde-pendent director.

In 2000, according to Hay Group, the average fee for a non-exec director across industries was ï¿¡25,000. This had gone up to ï¿¡35,000 by 2004, and as the above figures indicate there is no looking back for the moment.

These increases do not appear to be one-off adjustments to reflect the sudden new responsibilities of non-executive directors. The role of the non-exec is continuing to evolve – instead of sitting as a passive spectator the director is counted upon to challenge the CEO, question decisions, review and set executive pay, and take a magnify-ing glass to company accounts – and their fees are increasing significantly.

However, even as the fees continue to rise there is a shortage of people willing to take on such demand-ing roles. It seems that the knock-on effect of the increased responsibility is also an increased per-sonal threat of litigation and regulation as well as considerable risk to personal reputation.

But we have also seen recently with Vector Hospitality and the assumed value the company had attached to the appointment of Sir David Michels as a non-execu-tive director, there is still plenty of opportunity in today's market for those interested CEOs to earn their keep as non-execs.

Certainly, neither Tony Blair nor any other CEO should have any trouble finding a spot and they can be confident that they will be justly rewarded for their efforts.

The article has appeared in the Hotel Report in June 2007.

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