When examining Canadian board governance through the lens of the Globe and Mail Board Games, compensation is not merely an HR function—it is a critical metric of absolute alignment with shareholder interests. Criterion 8 (Director Compensation) explicitly measures “skin in the game.” To secure full marks, the board must mandate strict equity ownership guidelines and disclose a compensation structure heavily weighted toward Deferred Share Units (DSUs) over cash.

The Elimination of Meeting Fees

Over the past decade, Canadian corporate governance has decisively shifted away from per-meeting fees. The philosophy is straightforward: Directors are meant to be strategic overseers, not hourly consultants. Compensating directors per meeting inadvertently incentivizes volume over structural impact.

In the 2025 data, less than 12% of the TSX 100 continued to offer per-meeting fees. Instead, the standard is a flat-fee annual retainer that encapsulates all scheduled and ad-hoc committee work. Boards clinging to the legacy meeting-fee structure routinely lose fractional points on Criterion 8 and face sharp criticism during proxy season from institutional advisors like ISS and Glass Lewis.

Deferred Share Units (DSUs) as the Standard

To satisfy the “skin in the game” requirement, boards primarily utilize DSUs. Unlike stock options, which can create perverse incentives toward short-term risk-taking, DSUs act as phantom shares that are only redeemable when the director leaves the board.

When a board mandates that 50% or more of the annual retainer must be taken in DSUs, they signal to the market that the directors’ financial futures are irrevocably tied to the long-term, structural health of the company. A simple cash retainer, even a large one, fails this alignment test.

Compensation Component Impact

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