Rural Industries Research & Development Corporation

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3. THE ORGANISATION

Accountability Framework	Board and Corporate  Governance
Board membership	Directors’ responsibilities
Board committees	Board meetings
Internal control framework	Potential conflicts of interest
Contracts	Insurances
Associated company activities	Ministerial directions
Board costs and remuneration	Our People
Organisational Structure	xx

The Board and Corporate Governance
 

This section outlines key aspects of the Corporation’s governance practices in  1998/99

Composition The Corporation’s Board is comprised of nine Directors: the Chair, Deputy Chair, Government Director, five other Directors and the Managing Director.  Appointment The Minister for Agriculture, Fisheries and Forestry appoints eight of the Directors and the Board appoints the Managing Director. Six of the Directors are nominated by a selection committee established by the Minister in consultation with the National Farmers’ Federation, the Australian Egg Industry Association and the Australian Chicken Meat Federation for a period of up to three years.  Expertise The Directors are selected from a wide cross-section of the rural business community and together have brought to the Corporation expertise in production, processing, marketing, R&D administration, business management, technology transfer and environmental and ecological matters. Term The term of the six Directors nominated by the Selection Committee was reviewed in June 1999. Four new Directors were appointed from 1 July 1999.

 

Board Membership
as at 30 June 1999
 

Professor Elizabeth Woods Chair Appointed in January 1998 for three years. Professor Woods is the foundation Suncorp Metway Professor in Agribusiness at the University of Queensland’s Gatton campus.  She has a background in agricultural extension and research management in Queensland, specialising in field crops and horticulture.  She was formerly a member of the CSIRO Board and the Rural Adjustment Scheme Advisory Council and Director of the Rural Extension Centre. B. Agr.Sc(Hons) D.Phil (Oxon)

Mr John Herbert Deputy Chair Chair, Audit Board Committee Reappointed 1 July, 1996 for three years. Mr Herbert is Managing Director of The Goya Solution, a management consultancy specialising in assisting organisations to define and achieve their corporate goals.  He has special expertise in international agribusiness and is currently Chair of the Queensland Horticulture Industry Development Council, a member of the Board of the CRC for Tropical Plant Pathology and is RIRDC’s representative on the CRC for Sustainable Rice Production. Mr Herbert was re-appointed for three years from 1 July 1999.  Company Directors Diploma

Dr Martin Barbetti Non-Executive Director Appointed 1 July 1996 for three years. Dr Barbetti is a Senior Plant Pathologist with Agriculture Western Australia, a Senior Scientist with the Co-operative Research Centre for Legumes in Mediterranean Agriculture and an Adjunct Associate Professor with the Faculty of Agriculture at the University of Western Australia. Dr Barbetti has extensive experience in agricultural and horticultural research and development for a diverse range of agricultural industries. He also has strong commercial expertise in apiculture.  B.Sc. (Agric.), D.Sc. (Agric.), M.Sc. (Agric.),

 
 

Professor Margaret Britz Non-Executive Director  Chair, Human Resources Committee Reappointed 1 July 1996 for three years. Professor Britz holds the Foundation Chair in Food Science at the University of Melbourne and is Head of the Department of Food Science and Agribusiness.  She is currently a member of the Food Safety Council of Victoria, and was the former Principal Adviser, Science and Engineering Policy with the Department of State Development in Victoria. Professor Britz is also the former Chair of the Environment Council of Victoria. She is also a board member of the Australian Rural Leadership Foundation. She first joined the Board in July 1993. Professor Britz was re-appointed for three years from 1 July 1999. B.Sc. (Hons.), Ph.D.

Mr Sam Catalano Non-Executive Director Appointed 1 July 1996 for three years. Mr Catalano has extensive experience in tropical agriculture, particularly with respect to sugar, forestry and bananas.

Mr Peter Chapman Non-Executive Director Appointed 1 July 1996 for three years. Mr Chapman is the Chief Executive of Rothschild Australia Capital Investors Limited. He has special expertise in venture capital and is currently a Director of the Australian Venture Capital Association Limited. B.Comm, CPA

 
 

Ms Jan Davis Non-Executive Director Appointed 1 July 1996 for three years. Ms Davis is Chief Executive of Jawin Associates Pty. Ltd., a consultancy specialising in agricultural and particularly horticultural industries.  Previously, she was General Manager of the Australian Mushroom Growers’ Association, National Manager of Greening Australia Limited and Executive Officer of the Nursery Industry Association of Australia. B.Ec., Dip.Ed., Dip.Env. Studies, M.Env. Planning

Ms Virginia Greville Non-Executive Director Appointed 7 April 1998 as the Government Director. Ms Greville is an Assistant Secretary in the Department of Agriculture, Fisheries and Forestry with extensive experience in and knowledge of government policy processes, public administration and management.  Ms. Greville carried the same duties and responsibilities as other Board Directors. The Board recognises that as the Government Member, Ms. Greville has additional reporting obligations as a public servant as set out at Section 23 of the Commonwealth Authorities and Companies Act 1997. B.A., Grad.Dip. Pub. Law

Mr Peter Core Managing Director Appointed 27 May 1996. Mr Core has experience in agriculture-related fields and public sector administration. B.R.Sc., M.Ec.

 

New Directors
as at 1 July 1999
 

Ms Helen Cameron Non-Executive Director Ms Cameron is a director of Amrad Corporation Limited, TDG Logistics, the Sydney Catchment Authority and of Foodbank NSW Ltd. She has many years experience with agribusiness companies particularly the Australian food industry in areas of processing and marketing, and formerly held senior management positions in Burns Philp Limited and National Foods Limited. Other areas of expertise are ecology and genetics.  Appointed July 1999. BSc, MBA

Prof Robert Clark Non-Executive Director Prof Clark is Professor and Head of School of Agricultural Science at the University of Tasmania and founding Director of the Tasmanian Institute of Agricultural Research. He has extensive research experience and practical experience as owner of a diversified horticultural operation. Currently he sits on the Tasmanian Board of Agricultural Education and the Tasmanian Rural Industry Training Board and holds several other directorships with agricultural organisations.  Appointed July 1999. BAgrSc(Hons), PhD

Dr Paul Donaghue Non-Executive Director Dr Donaghue is a former chief scientist with Orica (ICI Australia) now conducting his own consultancy focusing on the development and implementation of technology strategy. His career has been largely concerned with the management of technology based groups and with issues of technology development and exploitation. He is a fellow of the Australian Academy of Technological Sciences and Engineering and the Royal Australian Chemical Institute. He is a past president and current executive member of the Australian Industrial Research Group.  Appointed July 1999. BSc, PhD, FTSE

Dr George Gardiner Non-Executive Director Dr Gardiner is the Chairman of the Ord River District Co-operative in the Kimberley region of Western Australia, where he and wife Elaine run a banana and sugarcane farm. He maintains his own consultancy with extensive experience in ecology, horticulture, pastoralism and community development. Dr Gardiner resides on several industry committees and boards including the Kimberley Development Commission (Deputy Chairman), Ord River Canegrowers Association (Executive Officer), AFFA Natural Resource Management Policy reference group and the National Irrigation Science and Technology Network.  Appointed July 1999. BSc, PhD

 

Directors’ Responsibilities

The Directors of the Corporation are responsible for ensuring that the affairs are properly managed and for setting the strategic directions to be followed by the Corporation. Their job is different from that of management.

The Board's functions include:

• Establishing goals and strategic direction.

• Approving policies, plans, performance targets and budgets.

• Assessing the performance of management against strategic goals.

• Monitoring policies, procedures and internal controls to manage business and financial risk.

• Ensuring compliance with statutory and legal obligations and meeting ethical and corporate governance standards.

The day-to-day management of the Corporation is vested in the Managing Director and the executive team. It operates within policies and controls approved and overseen by the Board.

As the delineation between some Board and management functions is not always clear-cut, the respective performances of the Board and the management team depend particularly on mutual confidence, teamwork and a sense of common purpose. The Board actively fosters the attendance of managers, where appropriate, at Board meetings and meetings of Board committees.

Board Committees

The Board has two committees – the Audit Committee and the Human Resources Committee. The record of both Committees is taken by the Board Secretary.
 

Audit Committee
Chair:	John Herbert
Members:	Sam Catalano  Peter Chapman Virginia Greville

(as at June ’99)

The Chair, Managing Director and the Manager, Business and Finance, have a standing invitation to attend meetings but are not members of the Committee.

The primary job of the Audit Committee is to ensure that our financial reporting is a true and fair reflection of our financial transactions.

Our Audit Committee is a s.32 requirement of the CAC Act 1997, '…providing a forum for communication between the directors, the senior managers of the authority and the internal and external auditors of the authority'.

During 1998/99 the Committee was instrumental in putting in place a Fraud Control Plan for the Corporation and, more generally, establishing a stronger interface between internal controls and our risk profile. The Audit Committee oversights our Y2K program.
 

Human Resources Committee
Chair:	Margaret Britz
Members:	Martin Barbetti  Peter Core Jan Davis  Melanie Herpen (staff representative)

(as at June ’99)

The Human Resources Committee finalised the details of a new employment contract which applies to less senior staff and runs from October 1998 for two years. It also oversighted the staff performance monitoring program and surveyed all staff on workplace issues.
 

Board Meetings

During 1998/99 the Board held five meetings: four in Canberra and one in Hobart where it met with senior industry representatives. The dates of these meetings were 9 September 1998, 2 December 1998, 24 February 1999, 29 April 1999 and 23 June 1999.
 

	Board		Audit		Human Resources
	No. meetings attended	No. meetings held & eligible to attend	No. meetings attended	No. meetings held & eligible to attend	No. meetings attended	No. meetings held & eligible to attend
E. Woods	5	5
J. Herbert	5	5	2	2
M. Barbetti	5	5			2	2
M. Britz	5	5			2	2
S. Catalano	5	5	2	2
P. Chapman	5	5	1	2
V. Greville	5	5	2	2
J. Davis	4	5			2	2
P. Core	5	5			2	2
M. Herpen*					2	2

* Staff representative
 
 
 

Internal Control Framework

The Board is responsible for the overall internal control framework but recognises no cost effective internal control system will preclude all errors and irregularities. The existing system is based upon written policies, procedures and guidelines, organisational structures that provide an appropriate division of responsibility, a program of internal audit, and the careful selection and training of qualified personnel.

During 1998/99 specific Board projects included the adoption of a two-year Fraud Control Plan, associated Action Plan and the Y2K Project. It finalised a new set of terms and conditions of employment for staff. A new policy framework for commercialisation arrangements for the Corporation was also put in place.
 
 

Potential Conflicts of Interest

Section 21 of the Commonwealth Authorities and Companies Act 1997 requires that a Director who has a direct personal interest in a matter that is being considered by the Board must disclose the nature of the interest at a meeting of the Board. During 1998/99, the Board minutes noted the following two potential conflicts of interest:

• Future decisions about a Corporation project, Creative Research Environments, led by Mr Tony Gleeson, because Professor Beth Woods is Mr Gleeson's Ph.D. supervisor at the University of Queensland.
• Professor Beth Woods and Mr John Herbert in relation to full proposal GLC99-21 Social and cultural barriers to developing trust within demand chains.

The Board believes that all necessary steps were taken to ensure that all potential conflicts of interest did not escalate into real conflicts of interest.

Contracts

Some directors have an interest in agreements entered into by the Corporation. They are as follows:

• Professor Beth Woods is the Suncorp Metway Professor in Agribusiness with the School of Natural and Rural Systems Management at the University of Queensland, Gatton College. During 1998/99 the Corporation funded research projects within her area of responsibility totalling $62,110.

• Mr Sam Catalano is a Director of a company that has provided industry funding associated with RIRDC project UJC-4A Soil ameliorants from rock quarry by-products: Developing new products for improved plant growth in highly leached tropical soils and testing their efficacy in the laboratory and the field. The value of the Corporation's and Mr Catalano's related entity contribution to this project during 1998/99 was $75,027 and $171,289 respectively.

Insurances

The Corporation became a member of Comcover, the Commonwealth's new mechanism for management of its insurable risks, on 1 February 1999. Prior to this date the Corporation's insurance coverage was contracted to Aon Risk Services Australia Limited, a private sector insurer.

The Corporation's membership to Comcover is mandatory and coverage includes public and products liability, professional indemnity, directors' and officers'/company reimbursement insurance, directors' and officers' supplementary legal expenses and general property insurances. Premiums paid in 1998/99 amounted to $22,029.

Sections 26 and 27 of the Commonwealth Authorities and Companies Act 1997 (the CAC Act) contain general prohibitions against the Corporation giving certain indemnities and paying certain insurance premiums in respect of directors and officers. In summary, these relate to liabilities arising out of conduct involving a lack of good faith by officers. During 1998/99, there were no exceptions to these prohibitions and no claim was made against the Corporation whereby the Corporation requested its insurances to respond.
 

Associated Company Activities

The Corporation is a founding member of the Australian Rural Leadership Foundation Ltd. One of our Directors, Professor Margaret Britz, is also a Director of the Foundation. The Foundation conducts the Australian Rural Leadership Program. For full details of the program and its activities, please refer to the Foundation’s annual report (phone (02) 6281 0680 for a copy).

The Corporation is a prime stakeholder of the Cooperative Research Centre for Sustainable Rice Production and is investing $3.5 million over seven years. The Rice CRC is an un-incorporated joint venture and RIRDC Director, Mr John Herbert, is a member of its Board.

The Corporation does not have any associated subsidiary companies.
 

Ministerial Directions

Under S.143 of the PIERD Act, the Minister may give written directions to the Corporation as to the performance of its functions and the exercise of its powers - no such directions were given in 1998/99.

In this context, no notifications were issued by the responsible Minister under S.28 of the CAC Act 1997 which relates to the Corporation complying with the general policies of the Government.

Under S.15 of the CAC Act 1997, the Corporation did not report any ‘significant event’ to the Minister, as defined in that legislation.
 

Board Costs During 1998/1999, the direct cost of Board operations was $218,536.  These costs included fees, travel and other meeting expenses. They did not include the Managing Director's salary or other management costs. The comparative figure for 1997/98 was $200,001.

Board Remuneration Directors’ fees are set by the Remuneration Tribunal. These fees were (effective 1 March, 1999) increased to $31,500 per annum for the Chair and $18,000 for Directors (other than the Managing Director and Government Director).  Managing Director’s remuneration arrangements are determined by the Board and, since December 1998, no longer have to be approved by the Minister.  The remuneration package for the Managing Director at end June 1999 consisted of: Base salary of $117,721 PSS Superannuation with an employer contribution of 11.1 per cent of base salary Fully serviced vehicle valued at $14,000 p.a. Annual performance bonus of up to 15 per cent of base salary.

Our People
 

Key Objective To attract and retain an innovative, productive, creative and committed group of staff. Key Results More staff now doing a greater mix of tasks. All staff — including those not based in Canberra — now accessing Corporate IT systems. Security passworded ExtraNet now set up and working. Workplace facilities audited and action taken to ensure the Corporation meets its obligations to staff. Only one claim lodged with Comcare in 1998/99. Absenteeism of 32 hours per employee in 1998/99 is down from 49 per employee in 1997/98. $2,000 per person training investment. The Year Ahead Continued priority on staff undertaking work related continuing education programs to ensure their preferences continue to grow and they stay with the Corporation. Have a workplace which results in zero Comcare claims. Ensure the Corporation is in the lowest 25 per cent quartile on absenteeism when compared to industry benchmarks.

How our staff are employed RIRDC staff are employed under Section 87 of the PIERD Act 1989. This legislation requires the Corporation to determine the appropriate established terms and conditions of employment for its staff.  During 1998/99 all staff other than those on individual contracts were covered by the RIRDC General Terms and Conditions of Employment set in October 1998. These terms covered a two-year period that expires on 30 September 2000. Under these arrangements the Corporation reserves the right to employ new staff on either individual contracts or on the general terms and conditions. Staff numbers and remunerations At the end June 1999 the Corporation had 15 staff members engaged on a full-time basis. Eight of these were on individual contracts. RIRDC also had a number of part-time staff. The staff structure at the end June 1999 is shown in Figure 4. Details on the salaries of full-time staff are summarised in the table below. Consistent with its legislative obligations, the Corporation is an equal opportunity employer. Base salaries of full-time RIRDC staff   Salary Range( $) Staff at  30 June 1999 Staff at  30 June 1998 120 001–130 000 1 1 110 001–120 000 - - 100 001–110 000  - - 90 001–100 000 - - 80 001–90 000 2 2 70 001–80 000  1 1 60 001–70 000  - - 50 001–60 000 2 1 40 001–50 000 3 2 30 001–40 000 5 5 20 001–30 000 1 2 Staff training The Corporation's training investment in 1998/99 was $28,659 This compares with $26,673 in 1997/98. On a per capita basis for our full-time staff, this represents an investment of nearly $2,000 in 1998/99. This investment focused previously on on-going tertiary education and computer application courses. Examples of tertiary educational assistance included the Australian Graduate School of Management MBA Program and the Graduate Diploma in Employment Relations at the University of Canberra. Both the Managing Director and the Board Secretary participated in the Company Directors' Course in 1998/99 run by the Australian Institute of Company Directors. Safety The Corporation continued to implement occupational health and safety standards in 1998/99. This included ergonomic assessments for all staff, which enabled workstations to be set to individual needs, encouraged safer work patterns and raised awareness of OH&S principles among Corporation staff.

Improved Communication Installed security pass-worded Extranet to enable all external staff and directors to have access to corporate information systems.             Our Customer  Values Commercially orientated Professional & ethical Quality service Accountable Our Staff Values Mutual trust Cohesive, co-operative team Consult openly, honestly Clearly define roles Commit to staff development

Improving the way we communicate RIRDC is only a small agency but we have a number of Research Managers who are part-time and operate from outside Canberra. Two way communication is vital and these managers need ready access to our corporate information systems. In 1998/99 we installed a security pass-worded ExtraNet which now enables managers and staff to access the projects management database and our other corporate information systems.  This initiative has enabled managers outside Canberra to be more "free standing" in their operations and lifted their effectiveness with industry parties. Our customer values To be commercially orientated, cost effective and able to deliver economic and social benefits for client industries and for government; To be professional and ethical in all our operations; To offer timely, courteous and quality service; and To be accountable, especially through effective reports to industry and government. Our staff values To nurture a climate of mutual trust and respect; To understand, accept and value individual differences and capabilities; To recognise and respect the role of a cohesive and co-operative team, built on shared goals, successes and setbacks; To communicate, question and consult openly and honestly throughout the whole organisation; To clearly define roles, delegations, responsibilities and accountabilities; and To support and commit to personal and professional development.

 
 

Last updated: 23 September 1999
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http://www.rirdc.gov.au/pub/anrep99/organisation.htm