Paying Your Board: The Smart Founder's Guide

As a founder, you’ve probably been told you need a board. Maybe you’ve already got one – a couple of investors, a friendly advisor, maybe even a seasoned operator you convinced to come on the journey.

But when it comes to paying your board members, things can get murky.

Should you pay them at all? In cash? In equity? What do investors get? What’s “normal” at your stage? How do you keep it fair without breaking the bank?

Let’s demystify board remuneration so you can build a board that adds real value, without the awkwardness or guesswork.

Why Pay Board Members?

There’s a myth in early-stage circles that board members should just want to help. That they’ll do it for the love, the experience, or the equity upside someday.

But here’s the truth: If you want proper commitment, you need to offer proper remuneration.

Here’s why:

• It prioritises your business – Paid board members are more likely to show up, do the prep, and support you between meetings.

• It levels the playing field – Not everyone can afford to work for free. Paying board members helps you attract a more diverse and representative board.

• It signals professionalism – You’re not running a hobby. Paying your board sends a clear message that you take governance – and their time – seriously.

Of course, the way you pay depends on your stage, funding situation, and what you want from your board.

How Should You Structure It?

There are two main options:

• Cash fees
• Equity (usually via options)

...or A mix of both

Fees

If you’ve got revenue or funding in the bank, paying board members a modest fee is a good way to lock in their time and energy. Think of it like paying for any other high-value service – and one that could directly influence your success. Fees are typically agreed on an annual arrangement and paid monthly. Some founders defer payment until the next round closes; just be upfront about the plan.

Equity

If your cash position is tricky and your business is early stage, then remunerating with equity can be a good idea, Just make sure:

• It vests over time (e.g. 2–4 years, often with a 12-month cliff)
• It’s structured via share options (so there’s no tax hit on day one)
• You have clear expectations about time commitment and contribution

Equity aligns your board’s interests with yours – they win when you win.

Do You Need to Pay Investor Directors?

The short answer is, No. Investors already have skin in the game. They sit on the board to protect and grow their investment, not for a fee. In fact, most VCs and angels won’t accept payment for board roles – it’s part of their value-add.

You do pay:

• Independent Non-Executive Directors (NEDs) – people you bring in for their experience, contacts, and independent perspective
• Chairs – especially if they’re actively supporting you between meetings

What’s the Going Rate?

Let’s be real: if you want serious value from your board, you’ll need to budget for it. The days of getting strategic input for a bottle of wine and a LinkedIn shoutout are (thankfully) behind us.

Here’s a clearer picture of typical UK rates:

Non-Executive Directors (NEDs)

Most experienced NEDs will charge a day rate of £1,000–£1,500.
You’ll typically need them for 1–2 days per month, depending on the stage and complexity of your business.

That works out at around £12k–£36k per year, sometimes more if they’re rolling up their sleeves between meetings.

Chairs

A great Chair is your strategic right hand – they’ll support you, challenge you, open doors, and guide the board.

Expect to pay in the region of £40k–£60k per year for 2–3 days per month involvement. For high-growth or venture-backed businesses, this is money well spent.

Advisory Board Members

Contrary to popular belief, advisory board members are often compensated, especially when they’re providing deep domain expertise or strategic support.

You might offer:

• A day rate (often lower than a NED, say £500–£1,000/day), or
• Equity in the range of 0.05%–0.25%, typically via options, often vesting over 12–24 months

Some founders use a “pay per call” or “quarterly retainer” structure for lighter-touch advisors.

Even if the time commitment is light, a symbolic payment or equity grant shows respect for their contribution, and keeps the relationship professional.

Don’t forget:

• D&O insurance (Directors and Officers liability cover)
• Legal fees for board contracts
• Expenses for board meetings, travel, and hospitality

How to Negotiate the Right Deal

If you're hiring a board member:

• Be honest about what you can offer (cash or equity)
• Set clear expectations on time commitment and support
• Offer a fair package that reflects their value – even if it’s symbolic at first

If you’re joining a board:

• Ask for clarity on deliverables and decision rights
• Don’t be afraid to negotiate – founders respect transparency
• Get everything in writing

What Should Be in the Contract?

You’ll want to issue a Letter of Appointment for every board member (whether paid or not), covering:

• Role and responsibilities
• Term and review periods
• Fees or equity (and vesting terms)
• Meeting schedule
• Confidentiality and conflict of interest clauses
• Termination terms

It doesn’t have to be complex – just clear.

Final Thoughts

Bringing on the right board members can change the game for your business. But their time, insight and experience are worth something – and should be treated as such. Compensating your board sends a powerful message: You value their input. You take governance seriously. And you’re building a business with long-term vision and integrity.

Need help shaping your board structure or working out fair remuneration? I’d be happy to support you in getting it right.