Rural Industries Research & Development Corporation

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Directors’ Report

Board Committees

During 2001–02, 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 2002)

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

During 2001–02 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 2002-2004, continued development on the IP Register, updated the Financial Management and Procedures Manual, and continued the schedule of audits of various research organisations.

Human Resources Committee
 

Chair:	Robert Clark
Members:	Margaret Britz Paul Donaghue Vicki Byrne (staff representative)

(as at June 2002)

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

During 2001–02 the Human Resources Committee (which had the functions of a remuneration committee) 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’ which requires a new contract to be put in place by 1 October 2002. This will be an important job of the Committee during early 2002–03.

The Committee oversighted the biennial staff survey, which was undertaken by the staff representative. The survey mechanism provides the Committee with feedback on all aspects of staff relations. The Committee also continued to maintain an oversight of the results of staff exit surveys.

Performance Committee
 

Chair:	Margaret Britz
Members:	George Gardiner John Herbert

(as at May 2002)

This Committee was set up in September 1999 to help the Board identify ‘value-adding’ opportunities in Corporation endeavours. The Committee has been instrumental in developing and implementing an omnibus performance management system for the Board, including director peer evaluation, director self evaluation and a board performance management system.

No formal meetings were held by the Committee in 2001–02. Having set the performance framework the focus turned to the Board to implement the new arrangements.

From its perspective, the Board felt that this Committee had achieved its objectives and dissolved the Committee in May 2002.

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
• monitoring its own performance against agreed indicators.

 

Board Costs During 2001–02, the direct cost of Board operations was $234,725. 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 2001–02 was $234,090.

Board Remuneration Directors’ fees are set by the Remuneration Tribunal. As at 30 June 2002 these fees were $35,000 per annum for the Chair and $20,000 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 2002 consisted of: base salary of $161,082 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 2001–02 this bonus was 16 per cent.

Board Meetings

During 2001–02 the Board held five meetings in Canberra. The dates of these meetings were
4 July 2001, 12 September 2001, 22 November 2001, 27 February 2002 and 8 May 2002.
 

	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	5	5	3	3	2	2	0	0
J. Herbert	4	5	3	3			0	0
M. Britz	5	5			2	2	0	0
H. Cameron	5	5	3	3
P. Donaghue	4	5	2	3	2	2
R. Clark	5	5			2	2
G. Gardiner	5	5					0	0
S. Hearn	5	5	2	3
P. Core	5	5
V. Byrne*					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.

The Board manages the potential for conflict of interest for Directors and senior management by an annual declaration of potential conflicts and by a standing agenda item at each Board meeting that requires Directors who may have a conflict of interest in any matter to be discussed at that meeting to identify the potential conflict. Where a material potential conflict is identified the Director leaves the meeting during discussion of the matter. Potential conflicts are recorded in the Board minutes and are available for consideration by the Corporation's Auditors.

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 2001–02 amounted to $26,740.

In June 2002 the Corporation’s offices were entered and computers stolen. Our Comcover insurances were activated to cover these items.

Fraud Control

The Board is satisfied that the Corporation has prepared a fraud risk assessment and fraud control plan, and has in place appropriate fraud prevention, detection, investigation, reporting and data collection procedures and processes that meet the specific needs of the Corporation and comply with the Commonwealth Fraud control Guidelines.

Associated Company Activities

The Corporation is a founding member of the Australian Rural Leadership Foundation Ltd. Two of our Directors, Dr George Gardiner and Dr Simon Hearn are Directors of the Foundation. Dr Gardiner is a continuing Director and Dr Hearn was appointed in September 2001. The Managing Director was appointed as an alternate member 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 65 per cent of overall Corporation funding (excluding industry levies) 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 2001–02.

In a similar 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 2001–02 Developments

A new Board was appointed on 1 July 2002. This new Board included five new directors. A new Managing Director was also appointed on 4 July 2002.
 

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