Rural Industries Research & Development Corporation

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Directors' Report

Board Committees

During 2001/2001, the Board continued to operate with three committees – the Audit Committee, the Human Resources Committee and the Performance Committee. The Board Chair is an ex-officio member of all Board Committees. The record of all Committee meetings continued to be taken by the Board Secretary and circulated to all Directors.

Audit Committee
 

Chair:	Helen Cameron
Members:	John Herbert  Paul Donaghue Simon Hearn

(as at June 2001)

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

During 2000/2001 the Committee oversighted our financial and management accounts including the Portfolio Budget Statement for AFFA, a risk management plan as required by the Department of Finance and Administration (Comcover), a new fraud control plan for 2000-2002, and ongoing GST compliance issues.

Human Resources Committee
 

Chair:	Robert Clark
Members:	Margaret Britz Paul Donaghue Carol Chapman (staff representative)

(as at June 2001)

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

During 2000/2001 the Human Resources Committee (which had the functions of a remuneration committee as mentioned on p. *) retained an oversight brief on staff relations and practices of the Corporation. Several staff are on a two year contract – ‘The General Terms and Conditions’. The contract was reviewed with Board endorsement at its September 2000 meeting. A new contract has to be put in place by 1 October 2002 and will be an important job of the Committee during 2001/2002. The Committee also continued to maintain an oversight of the results of staff exit surveys and general staff relations in the Corporation.

Performance Committee
 

Chair:	Margaret Britz
Members:	George Gardiner John Herbert

(as at June 2001)

This Committee was set up in September 1999 to help the Board identify ‘value-adding’ opportunities in Corporation endeavours. From its perspective, the Board already has a strong oversight of its compliance, reporting and other statutory duties. The challenge has been 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.

During 2000/2001 the Committee:

• Developed a set of Board Performance Indicators and initiated an annual Board Performance Review.
• Undertook a survey of the operational practices of RIRDC’s R&D Advisory Committees to review corporate governance, liability and consultation issues.
• Initiated a Board Forum for each Board Meeting where speakers could be invited to discuss a range of corporate governance or strategic issues.
• Developed a set of indicators for Director Self-Evaluation which will be undertaken on an annual basis by all Directors.
• Developed a set of indicators for Director Peer-Evaluation which will be implemented in 2001/2002.

Board Costs During 2000/2001, the direct cost of Board operations was $234,090. 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 1999/2000 was $265,172.

Board Remuneration Directors’ fees are set by the Remuneration Tribunal. As at 30 June 2001 these fees were $33,800 per annum for the Chair and $19,300 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 2001 consisted of: Base salary of $154,589 PSS Superannuation with an employer contribution of 11.1 per cent of base salary Annual performance bonus of up to 20 per cent of base salary. In 2000/2001 this bonus was 15 per cent.

Board Meetings

During 2000/2001 the Board held five meetings: four in Canberra and one in Leeton where it met with senior industry representatives. The dates of these meetings were 5 July 2000, 6 September 2000, 21 November 2000, 28 February 2001 and 9 May 2001.
 

	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	5
J. Herbert	5	5	4	5			3	3
M. Britz	5	5					3	3
H. Cameron	5	5	5	5	1	1
P. Donaghue	5	5	4	5	2	2
R. Clark	5	5			2	2
G. Gardiner	4	5					2	3
S. Hearn	3	5	3	5
P. Core	5	5
C. Chapman*					2	2

* Staff representative

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 2000/2001, the Board minutes noted the following potential conflicts of interest:

• Professor Clark declared a potential conflict of interest due to his position as principal investigator of RIRDC project UT-32A "Options series - Alternative land tenure arrangements for encouraging enterprise diversification". Board Resolution No. 55-2000-4.
• Prof Beth Woods informed Directors that there were 45 Preliminary Research Proposals submitted to RIRDC from the University of Queensland. Board Resolution No. 57-2000-4.
• Prof Margaret Britz advised the Board she had been appointed as Chair of the Rural Innovation Advisory Panel, appointed as a Director of the Australian Rural Leadership Foundation, is involved in a consultancy with the Victorian Department of Natural Resources and the Environment which is developing a tactical plan for the food processing industry in Victoria, and informed Directors that there were 12 Preliminary Research Proposals submitted to RIRDC from the University of Melbourne. Board Resolution No. 57-2000-4.
• Dr George Gardiner advised the Board that he has been appointed as a Director of the Australian Rural Leadership Foundation, is Chairman of the Kimberley Development Commission, Chairman of the Horticulture Partnership Group (disbanded March 2001) and Chairman of the Ord River District Cooperative. Board Resolution No. 57-2000-4.
• Prof Robert Clark informed Directors that there were 16 Preliminary Research Proposals submitted to RIRDC from the University of Tasmania. Board Resolution No. 57-2000-4.
• Ms Helen Cameron advised the Board that she has been appointed a Director to Burdett, Buckeridge & Young Limited (BBY Limited). Board Resolution No. 57-2000-4.
• Mr John Herbert declared a potential conflict of interest due to his acceptance of a contract with Southern Cross University to help commercialise the WideHyb technology. As RIRDC is a co-owner of this IP there was a need to declare a potential conflict of interest. The contract is based on a reduced "fee for service" plus a share of any resulting IP cash flow. Board Resolution No. 58-2001-6.
• Mr John Herbert declared a potential conflict of interest regarding his position on the CRC for Sustainable Rice Production and its possible funding application to RIRDC for the next CRC bid. Board Resolution No. 59-2001-5.
• Mr Herbert informed the Board that in his role as Deputy Chairman of the CRC for Sustainable Rice Production he now receives an honorarium. Board Resolution No. 59-2001-5.

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 2000/2001 amounted to $29,007.

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 2000/2001, 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. Two of our Directors, Professor Margaret Britz and Dr George Gardiner, are Directors of the Foundation. Professor Britz is a continuing Director and Dr Gardiner was appointed in September 2001. 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 the Deputy Chair of its Board.

The Corporation does not have any associated subsidiary companies.

Ministerial Reporting

Our key stakeholder is the Federal Government. It provides around 75 per cent of overall Corporation funding and the legislative framework under which we operate. In addition to the obvious linkages of Board appointments and corporate documentation such as the R&D Plan, the Annual Operational Plan and this Annual Report, the Corporation also reports to the responsible Minister after each Board meeting. Copies of all Board resolutions are forwarded with a covering letter, setting out the main issues discussed at the Board meeting. As well, the Corporation copies all Ministerial correspondence to the Department of Agriculture, Fisheries and Forestry – Australia.

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 2000/2001.

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

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

Post 2000/2001 Developments

In a legal sense, the operations of the Dried Fruits Research and Development Council were part of our operations in 2000/2001. Their financial statements are reported in our consolidated accounts for that period (p.109). On 1 July 2001 the Council moved to Horticulture Australia Limited.

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