Serving on a corporate board of directors can be a lucrative side gig or second career for high-profile executives and recent retirees. Board membership is less stressful and time-consuming than earlier positions board members have taken on, while still offering an impressive income.

The median compensation for members of private company boards of directors was $42,750 in 2020, according to a global study by Lodestone Global. That’s actually a 2% decline from the year before.

It goes a lot higher from there. Compensation for board members can easily reach $300,000 to $500,000 a year, according to Veritas, an executive compensation consulting service.

Not surprisingly, the most lucrative seats go to directors at S&P 500 companies. Average compensation in 2018 at those firms was $304,856, according to Reuters. That’s a 43% increase over 10 years. That year’s top payer was Goldman Sachs Group Inc., which paid its directors an average of $599,279.

Board members in general, by the way, participated in an average of 7.9 meetings, in person or remotely, during the year.

If you’re interested in pursuing a board seat, here’s what you need to know about what boards are looking for, how to get noticed, and what to expect as compensation.

What Companies Seek in a Board Member

You can sometimes learn what companies seek in their board members by reading the company’s annual proxy statement. For example, some of the qualities Wal-Mart says it’s looking for in board members include: ”outstanding achievement in their professional careers; broad experience and wisdom; personal and professional integrity; ability to make independent, analytical inquiries; experience with and understanding of the business environment; willingness and ability to devote adequate time to Board duties.”

The proxy statement also says the company is seeking “expertise in governance, strategy, development, and execution”; people who understand “financial, operational and strategic issues facing large retail companies”; global or international business experience; technology and e-commerce experience; marketing, brand management or public relations experience; finance, accounting, or financial reporting experience; or regulatory or legal experience. 

Diverse Candidates Sought

The more qualifications you can bring to the table, the better. In recent years, companies have also begun to seek ethnic and gender diversity on their boards.

These descriptions are fairly generic. By learning about the backgrounds of existing board members, you can extrapolate what the company is probably looking for in new ones.

Attractive qualities include experience in high-level work for the federal government, positions as a CEO or director, experience founding and running a successful startup, and experience on other boards.

Look for a gap in expertise that might be left when a current board member steps down. Could you fill that gap?

Youth Is Not a Barrier

Boards aren’t entirely made up of retirees and people nearing the end of their careers. You will compete for board positions with people who have been extremely successful at a young age.

Walmart’s current board members include Cesar Conde, 47, chair of NBCUniveral, and Marissa Mayer, 46, who is well-known for the high positions she achieved at Google and Yahoo. 

How to Get Noticed

Your strategy to get noticed and be considered for board membership should be similar to the strategy it takes to secure any high-level position.

“Make sure you develop a board resume that positions you as qualified for the corporation’s board,” says Renée Hornbaker, who currently serves on the boards of Eastman Chemical Company, The Freeman Company, and Tri Global Energy. “Make sure your resume states what you will specifically bring to the table as a board member.”  

Search Firms Can Help

Executive search firms can streamline the process since they’ll know about available positions. Hornbaker suggests giving your resume to search firms you’ve dealt with in the past and letting them know you’re interested in obtaining a board position. 

“Finally, make sure you are networking and letting people know what boards you are suitable for, while also leveraging contacts you might have with the companies that you might be interested in,” Hornbaker says. 

Networking Is Key

You’ll want to pursue networking both online and offline. For online networking, Mark Rogers, CEO of BoardProspects.com, recommends his site, a board-recruitment network akin to LinkedIn. Its members include current board members, aspiring board members, and corporations looking to hire board members. Complement your online networking with face-to-face connections at events, conferences, and social gatherings, he says. Opening up lines of communication to a second- or even third-degree connection could lead to an excellent fit for the board position you seek. 

Hornbaker also recommends becoming educated on the fundamentals of governance and directorship through a program such as the National Association of Corporate Directors Director Professionalism® program.

Once you find a good prospect, you must be nominated by the nomination committee, then approved by shareholder election. 

Director Responsibilities

Only outside directors get compensation specifically for serving on the board. Inside directors, who are mostly C-suite level executives, don’t receive additional compensation.

Hornbaker says pay depends on the complexity of the company, whether it’s public or private, the number of meetings it entails, and the amount of responsibility involved.

As a board member, your responsibilities would typically include preparing for and attending board meetings, and reviewing company filings and materials, she says, as well as advising management on a wide range of matters, including succession, strategy, compensation, and acquisitions. 

Representing Shareholders

Rogers adds, “Board members are the representatives of the shareholders, and it is their fiduciary duty to oversee the affairs of the corporation, including overall performance and fiscal strength, and to serve as a consultant for management – particularly with respect to the strategic and operational directives of the company.” 

Formal board meetings where all the directors are present typically occur four to six times per year, depending on the company. 

“Obviously, if there is a crisis or a strategic issue – for example, an acquisition – the number of hours for a director can dramatically increase,” Rogers says. 

Hornbaker says attending committee meetings might be another responsibility. “For example, audit committees have regular meetings before public filings,” she says. “Another example would be compensation meetings to discuss compensation plans and awards.”

Examples of Top-Paying Boards

 Here are a couple of examples of what Fortune 500 companies pay their board members.

Walmart Inc.

According to the company’s 2020 proxy statement, Walmart’s compensation program for outside directors offers base compensation of a $175,000 annual stock grant and a $100,000 annual retainer.

Outside directors who hold certain board positions receive an additional annual retainer: $35,000 for the lead independent director; $25,000 for audit committee members and for compensation, nominating, and governance committee members; and $20,000 for strategic planning and finance committee chairs and for technology and eCommerce committee chairs.

Apple Inc.

Apple’s non-employee directors each receive approximately $250,000 worth of restricted stock units per year, which are granted at the annual shareholder meeting and vest on Feb. 1 of the following year.

Non-employee directors also receive an annual cash retainer of $100,000. The board chair receives an additional $200,000; the audit committee chair receives an additional $35,000; the compensation committee chair receives an additional $30,000, and the nominating committee chair receives an additional $25,000.

Non-employee directors also get every new Apple product for free on request and can purchase more at a discount. 

To find out what any publicly held company pays its board members, read the company’s annual proxy statement, available from its corporate website or the Securities and Exchange Commission website.

The Bottom Line

As an outside director, you could bring a fresh perspective to a corporate board and leverage your years of experience as an executive into a satisfying new project that still leaves you with enough time to do your day job or enjoy your retirement. The Boston Globe reports that the average time commitment to serve on a board is fewer than five hours per week.

Aside from the financial compensation, your reward will be having substantial input into major decisions made by the company, such as executive hires, policies on dividends and stock options, and executive pay – all while representing the best interests of management and shareholders.