As you are asking about the 1099misc it is assumed the directors are not employees of the NP. If the director is self employed there is no FICA/ medicare withholding by the NP and the director includes the fees paid on the 1009misc as self employment income on the 1040 Schedule SE for FICA/medicare tax. See IRC 1402(a).
Correct. The directors are not employees of NP. A portion of director fees are put into a 457(b) deferred income account. What we are trying to determine is where is the deferral or reduction of fees shown on the 1099. The deferral is subject to FICA/Medicare, so if we reduce Box 7, then FICA/Medicare is shorted when the director uses that figure for SE purposes.