Corporate Governance
This section outlines key aspects of the Corporation’s governance practices in 2002–03 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 runs to 30 June 2005. Four new Directors were appointed for three years from 1 July 2002. A new Government Director was also appointed. The Chair’s term expires on 19 January 2004. The Managing Director’s term runs to 3 July 2007.
Board Committees
During 2002–03, the Board operated with three committees – the Audit Committee, the Human Resources Committee and the newly established Commercialisation Committee. The Board Chair is an ex-officio member of all Board Committees and the Managing Director is an ex-officio member of the Commercialisation Committee. The record of Audit and HRM Committee meetings is taken by the Board Secretary and the General Manager Business and Finance provides the secretariat for the Commercialisation Committee.(as at June 2003)
Chair: Helen Cameron Members: Barry Buffier Steve Marshall David Mortimer 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 2002–03 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), and revisions to the 2002–2004 fraud control plan to incorporate new commonwealth guidelines. It also continued development of the IP Register, updated the Financial Management and Procedures Manual, and continued the schedule of audits of various research organisations.
(as at June 2003)
Chair: Robert Clark Members: Robert Boshammer Mike Taverner Merryn West (staff representative) The Managing Director has a standing invitation to attend these meetings but is not a member of the Committee.
During 2002–03 the Human Resources Committee (which had the functions of a remuneration committee) retained an oversight brief on staff relations and practices of the Corporation. Nine staff are on a two year contract – ‘The General Terms and Conditions’ which was renegotiated effective from 1 October 2002.
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.
(as at June 2003)
Chair: Steve Marshall Member: Barry Buffier This Committee was set up in November 2002 to advise the Board on:
• the application of the corporation’s commercialisation principles
• strategic directions and associated commercialisation competencies
• guidelines on potential conflict of interest and risk management
• means by which the corporation can contribute to the national intellectual property debate and requirementsBoard meetings
During 2002–03 the Board held five meetings: four in Canberra and one in Adelaide where it met with senior industry representatives and key stakeholders. The dates of these meetings were 3 July 2002, 11 September 2002, 27 November 2002, 26 February 2003 and 7 May 2003.Board training and professional advice
During the year, there were several directors’ strategic forums and a targeted induction workshop. Two directors completed the Australian Institute of Company Directors Course. Individual directors also participated in a financial statements course, and a commercialisation course. Board members consult with the Managing Director when they consider external advice or expertise is required.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.1 Resigned 3 July 20022 Appointed 4 July 20023 Staff representative
Board Audit Human Resources Commercialisation 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 2 3 2 2 1 3 R. Clark 5 5 2 2 2 H. Cameron 5 5 3 3 B. Buffier 5 5 3 3 3 3 S. Marshall 5 5 3 3 3 3 R. Boshammer 5 5 2 2 M. Taverner 5 5 2 2 D. Mortimer 5 5 1 3 P. Core1 1 1 S. Hearn2 4 4 3 3 M. West3 2 2 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.Risk management
The Corporation’s risk management strategy was elaborated during the year with additional information categorising the risks into high, medium or low ratings. The strategy will be fully reassessed next year.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 2002–03 amounted to $41,139.
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.In August 2002 the Minister for Agriculture, Fisheries and Forestry advised the Corporation about the revision of the Fraud Control Policy of the Commonwealth. Under Section 28 of the CAC Act he requested that RIRDC adopt this policy. The necessary amendments were approved by the Board, and a revised fraud control plan was submitted to the Minister in May 2003. This plan was acknowledged and accepted by the government in a letter from the Parliamentary Secretary.
Associated company activities
The Corporation is a founding member of the Australian Rural Leadership Foundation Ltd. The Managing Director is a Director of the Foundation. Dr Mike Taverner is the alternate member. 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 Ms Helen Cameron is the RIRDC nominated member of its Board, with Mr Steve Marshall as the alternate member.
The Corporation has agreed to be a core member in the:
• Australian Poultry Cooperative Research Centre and will be investing $2.1 million over seven years commencing in 2003/04; and the The Corporation does not have any associated subsidiary companies.
• Australian Centre for Food Safety and Integrity Science and will be investing $160,000 over four years commencing in 2003/04.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.Ministerial directions and reporting
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 2002–03.In a similar context, one notification was 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 (see Fraud Control).
Under S.15 of the CAC Act, the Corporation reported one significant event to the Minister, as defined in that legislation.
The Corporation varied its Annual Operational Plan to reflect the departure of the Egg Industry Sub-account to Australian Egg Corporation Limited. This was notified to the Parliamentary Secretary, and approved on 30 April 2003.
Post 2002–03 developments
A new Corporate Plan 20003-2008 with a new program structure was endorsed by the Board and approved by the Parliamentary Secretary in August 2003.Board Performance Review
The annual board performance review has now become an established part of RIRDC’s governance and continuous improvement objectives. The review is structured to provide both an overall assessment and peer assessment of the board’s operations, skills and value adding contribution. The results are discussed by the Chair with all board members and are instrumental in addressing the board’s forward agenda for the year ahead. This approach was highly commended by the Review of Corporate Governance of Portfolio Bodies undertaken by Mallesons Stephen Jaques for the Department of Agriculture, Fisheries & Forestry in June 2002.As a result of this review, completed in May 2003, and subsequent deliberations a board members’ skills matrix was developed to enable the Directors to understand each others main skills and thereby to refine its own capacity for the future.
Other matters which were identified for attention included:
• relevant professional development of board members Each of these issues and other observations are being addressed including the more active use of board forums to improve on performance. This will be re-examined in 2003-04 to assess progress.
• improved understanding of public sector process and procedures
• more effective utilisation of rolling program evaluations
• more frequent update of board policies
• need to spend more time on strategy development and outcomes focus
• greater awareness of stakeholder and customer needs
• consistency of corporate five year plan to be reviewed whenever the board is considering corporate governance documents
 
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Last updated: October 2003
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