Board Framework Statement - for a year of challenge and change

February 2003

This Board statement, developed from discussion at the February board meeting, provides a Framework for AWI culture, operation, planning and reporting in 2003 and into years ahead.

  1. AWI's Mission is - To drive research, development and innovation that will increase the long-term profitability of Australian woolgrowers.
  2. The AWI Board recognises its responsibilities under company law to work for the best interests of all shareholders, and to meet expectations of woolgrowers and government as expressed through the Statutory Funding Agreement, Levy Polls and communications.
  3. AWI will model its reporting on that of a listed company with a wide shareholder and stakeholder base. AWI's formal plans and reports plus ongoing communications will provide informative, reliable material that actively helps stakeholder assessment of AWI performance against accountabilities in the Constitution, Statutory Funding Agreement, company law, and promises made by AWI Board and Executive.
  4. AWI's main performance and reporting focus will be its woolgrower shareholders. AWI will provide frank information, with positives and negatives, that aims to be useful to woolgrowers, including clear Annual Report financial statements. These reports should also meet the needs of Government and other AWI stakeholders.
  5. The Federal government, wool industry pipeline businesses and researchers are important stakeholders. AWI will consult and work with these groups. The best interests of woolgrower shareholders will often accord with the research and development (R&D) priorities of government and with the interests of the wool industry and community - but not always.
  6. AWI will work to achieve commercial outcomes for woolgrowers, and will implement a commercial focus in R&D investment decision-making, but the Board is not aiming to run Australian Wool Innovation Limited as a commercial business venture.
    • i. The former Board's Return on Investment Policy September 2001 is withdrawn. AWI will examine more appropriate ways of measuring and reporting the value added by AWI investment to woolgrower profitability, for inclusion in forward plans.
    • ii. AWI decision making will be driven by the objective of increasing long-term profitability of Australian woolgrowers, not by an aim to reduce reliance on levies or to maximise intellectual property or commercial returns (though these will be well managed).
  7. Adoption is essential to R&D success. AWI will work to ensure the relevance and cost-effectiveness of research results to encourage adoption. As a general principle, AWI will be looking to commercialise projects through licensing arrangements to provide products and/or services with appropriate royalties to AWI, rather than by owning businesses.
  8. Market failure will be an important consideration in R&D investment decision-making. AWI will incorporate a flexible market failure test into project evaluation processes.
  9. AWI will develop new advisory and consultation arrangements, with industry and researchers, to contribute to the defining of relevant and technically sound research.
    • This Framework will be implemented through the following 2003 activities:
    • The AWI Review of Performance now underway to fulfil AWI and statutory requirements. This Review will consider the points above in relation to projects and other activities. The Review of Performance report will be made available to levy payers before the Poll.
    • Next stages of AWI strategic planning, including preparation of the 2003-2004 Operating Plan by 30 June. External submissions to the Review of Performance and next stage planning will be invited.
    • Ongoing AWI decision-making on R&D projects and other areas of AWI management, as well as interactions with shareholders and stakeholders, and all AWI communications.
    • The AWI Annual Report 2002-2003 leading into the Annual General Meeting.
    • AWI inputs to the Levy Poll 2003 Panel for its preparation of the Poll Papers and Information Memorandum.

For AWI, the year 2003 will see positive consolidation and development under the guidance of the Board elected at the last Annual General Meeting (AGM) in October 2002.

Woolgrower shareholder expectations have been building for three years based on historical promises and AWI commitments, and there are review, planning and reporting requirements to meet and exceed. These will lead into the next AGM on 21 November 2003 in Perth, and the Wool Levy Poll, also to be finalised in November. An independent Levy Poll 2003 Panel will be formed with representatives of levy payers to develop the cases and Poll papers.

Hon Ian McLachlan AO
Chairman
Australian Wool Innovation Limited

 

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