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Many blue-chip companies often have the chief executive officer at the top of the corporate hierarchy, attracting the most public attention for steering daily operations and driving growth.
However, behind the scenes, the board of directors is an equally crucial component of corporate governance.
Members of these boards are often seasoned professionals who have served in other reputable institutions, locally and globally, bringing with them vast experience and influential networks.
Far from being symbolic figures, they are charged with safeguarding shareholder interests, ensuring compliance, and providing oversight that can determine whether a company thrives or falters.
It is against this backdrop that disclosures from firms listed on the Nairobi Securities Exchange (NSE) reveal striking figures, some board chairs earn between Sh6.6 million and Sh24.6 million annually, translating to Sh550,000 to Sh2 million monthly.
For positions that are technically part-time, these sums may appear extraordinary. Yet they represent the cost of governance in a corporate environment where risk, reputation, and accountability carry immense weight.
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Former KQ Board Chair Michael Joseph
Why firms pay so much
One of the main drivers behind the generous packages is the nature of the risk associated with board-level positions.
In modern corporate governance, directors are no longer ceremonial figures who meet occasionally to rubber-stamp executive decisions.
They are custodians of shareholder value, tasked with steering strategy, providing oversight on major investments, and ensuring the company complies with increasingly complex regulatory frameworks.
Unlike operational executives who can distance themselves from broad company failures, non-executive directors remain accountable even when they are not part of daily management.
The high pay, therefore, acknowledges that their risk exposure is permanent and significant.
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Former Safaricom Board Chair John Ngumi
The reputation premium
In a market where corporate scandals have previously dented investor confidence, companies now pay what can be described as a reputation premium.
Board chairs with clean records, long-standing credibility, and global connections are viewed as stabilising forces. Their presence reassures investors and regulators that the company is serious about accountability.
The value of their names, professional networks, and reputations goes beyond perception, it directly affects a company’s ability to raise capital, access favourable credit, and survive crises.
The millions they receive are therefore an investment in stability, not just remuneration for part-time work.
Balancing risk and reward
Another factor influencing director compensation is the balance between risk and reward.
Under Kenyan law, directors can be held personally liable for fraud, negligence, or regulatory breaches committed by the companies they serve. This means that accepting a board position is not a risk-free endeavour.
KenGen Board Chair Alfred Agoi Masadia
Consider state-linked firms where chairs at Kenya Power, KenGen, and East African Portland Cement earned between Sh3 million and Sh3.4 million annually.
While these numbers are modest compared to private sector giants, they still reflect significant responsibility.
This high-risk environment explains why compensation appears disproportionately large relative to the time directors actually spend in boardrooms.
In practice, they are trading not hours of labour but the weight of accountability, and the companies recognise this by offering packages that match the stakes involved.
The global benchmark
Kenya’s corporate landscape does not operate in isolation. Multinationals and firms with international shareholders face pressure to align with global standards of director compensation.
In markets such as the United States and Europe, non-executive directors earn substantial retainers, and chairs of large companies are often paid in ways that dwarf senior executive packages in smaller economies.
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An illustration of a diverse group of African billionaires in a corporate boardroom, with an airport and a private jet visible in the background.
Kenyan companies, therefore, benchmark their packages against international standards.
Directors with global experience, international exposure, and deep professional networks can elevate Kenyan firms into regional and global competitiveness, making their presence worth the significant cost.
Beyond the numbers
At its heart, the high cost of board leadership is about risk, reward, and reputation. Shareholders may question why part-time roles attract full-time pay, but the hidden costs of poor governance often far outweigh these expenses.
A weak board can lead to regulatory fines, collapsing share prices, and loss of investor trust, all of which can wipe out billions in market value.
Strong boards, on the other hand, ensure stability, accountability, and long-term growth. The millions spent on experienced directors act as a safeguard against risks that could otherwise cripple companies.
Ultimately, these payments are not merely salaries; they are strategic investments in resilience and trust.