Health authority and trust board members are to get their first pay rise in eight years, raising the maximum payment for a chair by£540 to£19,825 a year.
The 2.8 per cent increase will be backdated to 1 April and fees will be reviewed annually in future.
Announcing the increases, health secretary Frank Dobson said: 'This is the first time that remuneration has been increased since 1991 and recognises the demands which are placed on our non-executives.'
The Department of Health said this week that the increase will cost about£550,000 a year, although it expects this to be reduced by mergers.
The increase stems from the work of a group set up last year by the NHS Confederation, which led to a 'joint understanding' with the government on the roles of NHS board members.
The confederation argued that the work of chairs and non-executive directors was not being fully recognised because:
the government's NHS reforms have resulted in an increased workload; and
their role has been undermined by allegations that some are being selected for being Labour activists, rather than on merit.
The allegations of political bias are being examined by a scrutiny group set up by commissioner for public appointments Dame Renee Fritchie. She has said she 'recognises that concerns can be based on perception rather than reality, and wishes to establish the facts'.
The scrutiny will look at North West and Yorkshire regions as examples, and report back at the end of December, following completion of the current round of appointments.
Streamlining the appointments process was given a high priority by the confederation working group. The joint understanding says it should ensure that 'the overriding consideration is the appointee's merit'.
The understanding also says HAs and trusts should 'ideally have a full complement of chairs and non-executives' and suggests that retiring board members could be invited to stay until replacements are found.
The understanding sets out nine main functions for chairs and non-executives. They include providing leadership to ensure the strategic direction of the HA or trust matches government policy and local needs, promoting quality and safeguarding the rights of service users.
Non-executive directors are also expected to take a leading role in developing partnerships with the local community, local authorities, and other organisations contributing to health, and to provide independent scrutiny of management.
A working group will develop the understanding into a handbook for non- executive directors.