CEO and director lobby groups, such as the Business Council of Australia and Australian Institute of Company Directors, are quick to defend the hefty cost of executives and directors.

Executives are paid hundreds of times average wages because they allegedly boost the shareholder returns while working arduous hours and facing repuational and financial hardship if things go awry. Similarly, it is claimed that company directors are exiting their profession in droves due to the onerous responsibilities and potential liability which attaches to the role.

It however, is difficult to reconcile such claims with the ever increasing phenomena of executives taking up non-executive roles at other publicly listed companies. Most recently, earlier this week Telstra announced that long-serving chief financial officer (and leading CEO candidate to replace Sol Trujillo), John Stanhope, had accepted a non-executive directorship at AGL Energy.

Telstra chairman, Donald McGauchie, appeared unperturbed by the appointment, noting that Telstra “looked forward to [Stanhope’s] contribution to the AGL board.”

Last year, Stanhope collected remuneration of $3.63 million (a figure which would rise substantially should he be appointed CEO of Telstra). Given that outlay, Telstra shareholders may be somewhat surprised at McGauchie’s enthusiasm for Stanhope’s role at AGL.

Last year, AGL held more than 20 regular and special board meetings, most likely requiring a time commitment of several hundred hours. It would therefore appear difficult for Stanhope to satisfy both non-executive directors’ duties as well as an executive role. (Similarly, outgoing Telstra CEO, Sol Trujillo, retained a long-time board seat at US retailer Target throughout his tenure at Telstra and while he was CEO of US West).

Stanhope is however hardly the only executive who has assumed a non-executive role at a leading public company. Telstra appointed former NAB CEO, John Stewart to its board in April 2008. NAB shareholders may have been forgiven for expecting Stewart to devote his full attention to the bank given the worldwide economic collapse and his remuneration of $8.18 million. Last year, NAB announced that it had lost around $1 billion due to failed investments in US housing loans.

Former Coles Myer chief John Fletcher, whose bullish forecasts drove away private equity (and instead, the company was sold to Wesfarmers for a far lower price) was also otherwise occupied with a board seat at Telstra. Notwithstanding his outside appointment, Fletcher collected $4.6 million in 2006 and $4.4 million in 2005 and $5.3 million in 2004 while occupying the duel roles.

However, the busiest man in corporate Australia would most likely be former UniTab and current Tattersalls boss, Dick McIlwain. In addition to serving as the CEO of one of the Australia’s largest gaming companies, McIlwain is the chair of fast-growing, ASX-listed companies, Supercheap Auto and Wotif. While one of the most respected executives in the country, even the 51 year-old McIlwain may find it difficult to fully commit to his executive functions as well as attend fifteen board and committee meetings at Tattersalls, thirteen board/committee meetings at Supercheap Auto and twenty five board and committee meetings at Wotif annually (as occurred in 2008). Despite his extensive outside commitments, McIlwain was paid $3.2 million by Tattersalls last year

Long serving Leighton CEO Wal King has served a non-executive of Coca Cola Amatil since 2002. Given that Leighton shareholders paid King an $16.5 million in 2008, $13.9 million in 2007 and $11.4 million in 2006, they would hope he would devote his full capacities to Leighton. King, whose highly unusual remuneration arrangements provide for him to receive a cash bonus based on 1.5% of Leighton’s net profit after tax possibly had his mind on other matters, as Leighton shares slumped by 70% in the past year.

Given the financial crisis enveloping the globe, shareholders would be justified in expecting that their highly paid executives devote 100 percent of their time and attention to their own company, rather than building up their resumes with lucrative outside directorships.