New Zealand’s double standard on doing good

Thursday, August 17th, 2017

Why do we balk at paying people to do good?

In New Zealand the average salary for the CEO of a top 50 listed company is $1.68 million and the average salary for a CEO of a charity is just over $220,000.

Some analysts suggest the average CEO salary in the broader not-for-profit sector is as low as $100,000.

The level of remuneration afforded to leaders engaged in profit-generating enterprise is justified based on the value they create for shareholders or owners.

But if you were to suggest that the CEO of a successful charity gets paid, say $4 million – the amount earned by the Fletcher Building CEO in 2015 – there would be an immediate outcry.

Before you laugh at me for being naïve and idealistic about giving millions of dollars to a charity boss, if this were a charity with a bold and innovative strategy to end homelessness in New Zealand, with proper monitoring and measurement of successful outcomes, don’t you think $4 million would be a fair price to pay?

Imagine if you could get Rod Drury to step away from Xero for a few years to run this, or Joan Withers. Whoever. {Insert your own favourite businessperson here}.

The point is that we could potentially turn some of these intractable problems around if we could capture the interest and attention of some of our highly networked and successful entrepreneurs with a decent salary.

But we don’t. It seems we have one rule for what’s acceptable for not-for-profits, and another for commercial enterprise.

In a 2017 review of the not-for-profit sector by JBWere the authors say, despite growing interest in and appreciation of the critical role of the sector in New Zealand “It is still true that the sector is only reimbursed for its successes, not rewarded.”

I want to talk about the senselessness of this double standard but first – why does it matter now? Continue reading