How much do Malaysian FI boards really cost?

Board chair retainer fees were typically 1.3 to two times higher than other board members.

Malaysia’s total governance costs of financial institutions, encompassing all board member compensation, ranged from $112,442 (RM500,000) to $786,957 (RM3.5m), according to Aon.

Average total governance costs by institution type were: Corporate banks (RM 1.2M), Insurance companies (RM 0.9M), Investment banks (RM 1.7M), Islamic banks (RM 1.3M), Retail banks (RM 1.8M), and Takaful operators (RM 0.8M), revealed Aon in collaboration with FIDE FORUM’s 2024 Director’s Remuneration Report.

Board chair retainer fees were typically 1.3 to two times higher than other board members, whilst meeting allowances were consistent across roles. 84% of participants did not compensate for information meetings, whilst 6% compensated for regulatory meetings and 11% for ad-hoc discussions. 

Nearly all of participants provided director insurance (including D&O liability, group term life, personal accident, and travel), and 56% offered medical benefits. 33% provided learning and development opportunities. 

All participants had audit and risk committees, as mandated by Bank Negara Malaysia (BNM), but only 92% had nomination and remuneration committees, often combined and sometimes handled at a group level for subsidiaries. 

The report also noted board diversity in tenure, gender, and age: 87% of boards had at least one woman director, with 33% having three or more; 67% of directors were over 60, with 13% over 80; 59% of independent NEDs served one to six years, and 48% of non-independent NEDs served one to nine years.