2000 ANNUAL REPORT - Contents Page

Corporate Governance


Governance refers to processes by which organisations are directed and controlled – encompassing authority, accountability, stewardship and leadership. Corporate governance is concerned with structures and processes for decision–making, and with controls and behaviour within organisations that support effective accountability for performance outcomes.

Accountability Framework (as at 30 June 2000)

The Board
This section outlines key aspects of the Corporation’s governance practices in  1999/2000

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 for three years from 1 July 1999. The Government Director changed over on 16 February 2000.


Board Membership (as at 30 June 2000)
 
Professor Beth Woods OAM
Chair

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 is the incoming Chair of the Australian Centre for International Agricultural Research.

Appointed 19 January 1998 for three years

B. Agr.Sc(Hons) D.Phil (Oxon)

 Mr John Herbert
Deputy Chair
Chair, Board Audit Committee

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, Chair of the Board of the CRC for Tropical Plant Pathology and is RIRDC’s representative on the CRC for Sustainable Rice Production, Director of Golden Casket and Lottery Corporation.

Re-appointed 1 July 1999 for three years

Company Directors Diploma

 Professor Margaret Britz
Non-Executive Director
Chair, Board Performance Committee

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. 

Re-appointed 1 July 1999 for three years
B.Sc. (Hons.), Ph.D.
Ms Helen Cameron
Non-Executive Director 
Chair, Board HumanResourcesCommittee

Ms Cameron is a director of Amrad Corporation Limited, TDG Logistics, the Sydney Catchment Authority and of Foodbank NSW Ltd. She is a member of the NSW Food Forum and is on the editorial board of JASSA. She was formerly Head of Research with a leading stockbroking firm, and was involved in capital raisings for a number of food and agribusiness companies. 

Appointed July 1999 for three years
BSc, MBA

 Dr Paul Donaghue
Non-Executive Director

Dr Donaghue is a former chief scientist with Orica 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 for three years
BSc, PhD, FTSE

 Professor Robert Clark
Non-Executive Director

Professor 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 for three years
BAgrSc(Hons), PhD

 
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 for three years
BSc, PhD
 
 

 

 Dr Simon Hearn
Non-Executive Director

Dr Hearn replaced Ms Virginia Greville who resigned on 16 February 2000 to take up an overseas appointment for the Australian Government. Dr Hearn is the First Assistant Secretary, Portfolio Policy and International Division, Department of Agriculture, Fisheries and Forestry – Australia. Dr Hearn has extensive experience and knowledge of government policy processes, public administration and management. He has a background in agricultural management, economics research, and international trade. Dr Hearn has been a director of a range of agricultural authorities.

Appointed 16 February 2000.
PhD., BSc (Hons).

 Ms Virginia Greville
Non-Executive Director

The Government Director from April 1998 to February 2000. Ms Greville was 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.

B.A., Grad.Dip. Pub. Law.
 
 

Non-Executive Director
Mr Peter Core
Managing Director

First appointed 27 May 1996. Mr Core has experience in agriculture-related fields and public sector administration.

Re-appointed 27 May 2000 for two years
B.R.Sc., M.Ec
 
 
 
 

 

Directors’ Report
Board Committees

The Board has three committees – the Audit Committee, the Human Resources Committee and a new Performance Committee set up by Board Resolution 51-1999-18. The Board Chair is an ex-officio member of all Board Committees. The record of all Committees is taken by the Board Secretary.

Audit Committee
Chair: John Herbert
Members: Helen Cameron
Paul Donaghue
Simon Hearn
(as at June 2000)

The 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 an 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 1999/2000 the Committee oversighted our financial and management accounts and was responsible for ensuring the Y2K program was implemented and for our GST preparations.

Human Resources Committee
Chair: Helen Cameron
Members: Robert Clark
Paul Donaghue
Carol Chapman (staff representative)
(as at June 2000)

The Managing Director has a standing invitation to attend meetings but is not member of the Committee.

During 1999/2000 the Human Resources Committee retained an oversight brief on staff relations and practices of the Corporation. A majority of the staff are on a two year contract – ‘The General Terms and Conditions’ – and this contract was not up for renewal during this reporting period. A new contract has to be put in place by 1 October 2000 and will be an important job of the Committee.

Performance Committee
Chair: Margaret Britz
Members: George Gardiner
John Herbert
(as at June 2000)

This Committee was set up in September 1999 to help the Board identify ‘value-adding’ opportunities in Corporation endeavours. From its perspective, the Board has a strong oversight of its compliance, reporting and other statutory duties. The challenge is to add value to the direction and shape of the diverse R&D program – beyond that already provided by the RIRDC Advisory Committees appointed under S.89 of the PIERD Act 1989. The terms of reference of this new Committee are:

Board Costs

During 1999/2000, the direct cost of Board operations was $265,172

These costs included fees, travel and other meeting expenses. They did not include the Managing Director's salary, Directors’ selection costs or other management costs.

The comparative figure for 1998/1999 was $218,536.
This increase in board operational costs during 1999/2000 is attributable to:

The directors’ fees and travel allowances set by the Remuneration Tribunal increasing by approximately 6 per cent.

  • The Board travelling to Western Australia in September 1999 to visit RIRDC funded research and meet with key stakeholders.
  • The increased costs of a Board induction workshop held for directors in July 1999 and increased travel costs associated with the new Board.
 Board Remuneration

Directors’ fees are set by the Remuneration Tribunal. As at 30 June 2000 these fees were $32,600 per annum for the Chair and $18,600 for Directors (other than the Managing Director and Government Director). 

Managing Director’s remuneration arrangements are determined by the Board. 

The remuneration package for the Managing Director at end June 2000 consisted of:

  • Base salary of $123,725
  • PSS Superannuation with an employer contribution of 11.1 per cent of base salary
  • Fully serviced vehicle valued to $27,525 per annum
  • Annual performance bonus of up to 20 per cent of base salary

Board Meetings

During 1999/2000 the Board held four meetings: three in Canberra and one in Perth where it met with senior industry representatives. The dates of these meetings were 7 September 1999, 24 November 1999, 23 February 2000 and 10 May 2000.
 
 
Board
Audit
Human Resources 
Board Performance
 
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
No. meetings
attended
No. meetings held &
eligible to attend
E. Woods
4
4
            
J. Herbert
4
4
4
4
    
1
1
M. Britz
3
4
1
1
    
1
1
H. Cameron
4
4
3
3
0
0
    
P. Donaghue
4
4
3
3
0
0
    
R. Clark
4
4
    
0
0
    
G. Gardiner
4
4
        
1
1
S. Hearn*
2
2
1
1
        
V. Greville*
2
2
3
3
        
P. Core
4
4
            
C. Chapman**        
0
0
    
* Dr Hearn replaced Ms Greville on 16 February 2000
** Staff representative

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 and is not another layer of management.

The Board's functions include:

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.

Resource Allocations

One of the key, and most difficult, jobs of the Board is to determine the split of RIRDC Core Funds which, in 1999/2000, was $11.09 million. To aid their budget deliberations, Directors held two workshops, in November 1999 and February 2000, as a prelude to drawing up the Annual Operational Plan 2000–2001. The outcomes of these two workshops fed into the AOP decisions, in the sense that the proposed changes in resource allocation were to be taken as indicative of a general direction for change rather than firm targets. In terms of the 2000–2001 budget:

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 1999/2000, the Board minutes noted the following potential conflicts of interest:

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. Also see Note 12 of the Financial Statements ‘Related Party Disclosures’.

Insurances

The Corporation has been a member of Comcover, the Commonwealth's new mechanism for management of its insurable risks, since February 1999.

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 1999/2000 amounted to $24,102.

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 1999/2000, 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 1999/2000.

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.


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Last updated: 10 October 2000
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