Annual Report 2002 Supporting Australian directors through our goals Contents Our 2001—2002 mission President and Chief Executive Australian Institute of Company Directors is Australia’s professional Officer’s Report 2 organisation for directors providing education, information, and advocacy. National Office Reports Our 2001—2002 goals • Education 4 Australian Institute of Company Directors strives to: • State services and events 5 1. meet the information and education needs of directors • Policy and advocay 5 2. promote excellence in director performance • Operations 6 3. provide a valued directors’ network • Finance 6 4. attract and retain members National Councillors 7 5. be a successful advocate for directors’ issues, and State Division Reports 6. be a financially sound, efficient, and caring organisation. • New South Wales 8 • Victoria 9 AICD Five—year summary • Queensland 9 • Western Australia 10 2002 2001 2000 1999 1998 • South Australia and Northern Territory 10 Membership at yearend 16,365 15,687 14,765 14,087 13,417 • Australian Capital Territory 11 Membership growth 4.3% 6.2% 4.8% 5.0% 4.1% • Tasmania 11 Net surplus $2,021,245 $591,253 $506,874 $646,488 $503,188 Corporate Governance 12 Gross revenues $15,945,798 $13,620,423 $12,487,946 $10,771,825 $9,429,421 Division Councils 13 Net assets $5,080,079 $3,058,834 $2,467,581 $1,960,707 $1,314,219 AICD Committees 14 Cash investments $7,866,781 $5,476,106 $3,918,430 $3,310,398 $2,170,684 Net assets as a % of gross revenues 31.9% 22.5% 19.8% 18.2% 13.9% Financial Report 15 Cash investments as a % of gross revenues 49.3% 40.2% 31.4% 30.7% 23.0% Net surplus as a % of gross revenues 12.7% 4.3% 4.1% 6.0% 5.3% Our goals Kathryn Hudson, Senior Membership Pictured on the front cover from the top left are staff members: Valerie Landgrebe (WA Division Office), Executive, NSW Division Office Rosanna McDonald (SA-NT Division Office), Tim Booth (National Office), Anita Sawa (National Office), Ray Srodzinski (Tasmania Division Office), Karen Birkett (National Office). AICD Annual Report Twelve years on AICD celebrates The beginnings of Australian Institute of Company Directors (AICD) can be traced back to the United Kingdom’s Institute its most successful year to date of Directors (IoD), formed by Royal Charter in 1906. Branches of the IoD appeared having delivered a record number in the Australian States in the 1960s. These branches were united in January 1971 under of Company Director Courses, The Institute of Directors in Australia, an autonomous body affiliated with the IoD in the core education programs, director United Kingdom. The challenge of servicing State branches brought the arrival of a briefings, and networking events. competitor, The Company Directors Association of Australia, in 1982. The two bodies merged on 1 January The financial year closed 1990 to form AICD. with AICD in a strong financial position which will enable an expansion of education and other services in the forthcoming year. The following pages record 2001 our success in the year and 2002 outline future initiatives to expand our role as the professional organisation for directors in Australia. Lindy Chapman, Membership Services Data Analyst and Gliselle Quita, Assistant to National Finance Manager, 1 both of the National Office President and Chief Executive Officer’s Report Goals of AICD ustralian Institute of Company Directors “Catch the Future” proved to be the most A (AICD) has continued to develop its successful Company Directors Conference to To meet the services to provide education, information, and date. A program of international and national professional support for Australian directors at speakers dealing with current issues attracted each stage of their career. 500 members. Delegate feedback showed a 20 information and Best practice in directorship, both per cent increase in satisfaction with key nationally and internationally, is continually elements of the event on last year’s conference. being researched and communicated by AICD’s education needs policy and advocacy department. Trends are Promoting excellence in directorship monitored and relevant education and of directors information is provided to assist directors and The delivery of new courses, the review of senior managers in making boards more existing course materials, and the launch of new effective. publications, are testimony to AICD’s This report provides highlights of AICD’s commitment to promote director excellence. year, focusing on its goals and the success in Coupled with this, there has been a five per cent achieving those goals. increase in the number of Company Directors 1 Course participants undertaking the non- compulsory course assessment. A total of 875 Achievements towards this goal during Meeting directors’ education needs participants sat the examination and completed 2001—2002 include: Demand for AICD courses continues to grow. the assignment task that led to the award of the During the past financial year there has been a Company Directors Course Diploma. • a 27 per cent increase in 27 per cent increase in enrolments, with more Library services and facilities at AICD have enrolments, with more than 27,000 than 27,000 participants in AICD courses and been upgraded to increase the availability of participants in AICD courses and training programs. More than 1,500 participants information on director issues and best practice training programs undertook the flagship course, the Company internationally. The seventeenth edition of Directors Course, a 25 per cent increase on last Duties and Responsibilities of Directors and Officers • a 25 per cent increase in year’s numbers. was released and all members received copies in enrolments in the Company To meet demand, five additional residential May 2002. This text is a comprehensive, plain Directors Course, with more than Company Directors Courses were scheduled English guide to the law affecting Australian directors and officers and the new edition details 1,500 participants bringing a record total of 18 residential courses for the year. Requests for tailored in-house the recent changes to the Corporations Act and recent court decisions. • a record total of 18 residential workshops has nearly doubled with 23 programs, involving 460 participants, conducted by AICD The Law Reporter pages, Australian courses State offices during the year. Securities and Investments Commission column, Asia-Pacific interest in AICD courses is and industry leader interviews featured in the • requests for tailored workshops growing with members of the Philippines Company Director journal inform members of doubled. Institute of Corporate Directors participating in director best practice. A Taylor Nelson Sofres two Company Directors Course residential Survey 2002 showed that 95 per cent of AICD courses. Discussions have been held with members “highly regarded” the journal. Another counterparts in China, Indonesia, and Papua initiative in promoting excellence was AICD’s New Guinea to explore ways in which AICD three-year commitment to be the principal education can be provided to assist their sponsor of the Australasian Annual Reporting corporate development. Awards. The awards promote and acknowledge During the year, the Company Directors excellence in reporting by companies, Course notes and other core education material government entities, and not-for-profit organi- were completely reviewed to include current sations. legislative developments and new case studies; communicate in plain English; and provide Providing a network for directors standardised tutor presentations. To ensure the continued quality of AICD A record number of 40 networking events and education services further investment was made 61 luncheons were hosted by AICD around in staff, course materials, specialised education Australia during the year. These activities allow programs, and the Company Directors members and business leaders to get together, to Conference. receive compliance and governance updates, Two new specialised programs, “Forensic and to share their experiences. investigation for directors” and “Implementing Database research conducted in June shows compliance”, were introduced. A further two AICD membership is made up of 51 per cent of new programs, “Company audits: lifting the veil” the directors sitting on the boards of the and “Handling difficult situations in the Australian Stock Exchange’s top 200 companies boardroom”, have been developed and will be and that 119 of those members hold the position offered to members in all States in the new of chairman of the board. financial year. The timely launch of three AICD texts, The Ms Marie Lucas and Mr Garry Hansen Twenty-First Century Board: selection, attending a Company Directors Course performance, and succession, Audit Committee residential held in Canberra (April 2002). Best Practice Guide, and 50 Matters to be considered before signing a company’s financial statements, brought sales that exceeded expectations as directors sought guidance in these important areas. 2 AICD Annual Report Growing the membership National Council of AICD endorsed three Future strategy policy positions on the subjects of sustainability, Membership grew by 4.3 per cent during the year intangible assets, and the requisitioning of The strong financial result has enabled the to a total membership of 16,365 at the end of the company meetings. This policy work and allied National Council to provide additional financial financial year. Research was conducted to media releases