Why is it important that board members of charitable and nonprofit organizations not receive financial compensation for their role as a director? This standard prohibits board members from receiving monetary compensation in return for their service as a director of the board. “In their capacity as a director” implies that board members may be paid for services they provide to the nonprofit or charitable organization in another role, for example as a consultant (although a director in this position must abide by all conflict of interest policies and procedures). In the case of charities that are registered under the Income Tax Act, certain provinces prohibit directors from receiving any remuneration in any capacity, as this is seen as an inherent conflict of interest.1 (Also see Standard B12).
From "Accreditation Preparation Workbook Section A: Board Governance," Katharine Zywert, Social Prosperity Wood Buffalo at the University of Waterloo, 2013.
Standards Reference Guide