Governance

The AgriFutures Australia Board is committed to governance systems that enhance performance and compliance. Each Annual Report includes a description of how strategic directions, policies and processes have been applied during the year. During the year, the Board reviewed policies and processes concerning all major areas of Board operations, including Director and Board performance, risk management, conflicts of interest, Board subcommittees, and the Managing Director’s performance. AgriFutures Australia’s management policies and procedures will
continue to be refined and updated as standard practice within the organisation.

The Board provides strong leadership and requires that AgriFutures Australia’s staff have their qualifications, skills and experience enhanced with formal and on-the job training each year. An Audit Committee and other committees of the Board are established from time to time to support the Board. Appropriate advisory panels with relevant skills to AgriFutures Australia research programs are established to ensure that projects are properly guided, and that industry and government funds are spent wisely.

Board charter

The AgriFutures Australia Board Charter sets out the function, duties and responsibilities of the Board in order to facilitate Board and management accountability for AgriFutures Australia’s performance and strategic direction.

The Board is committed to fulfilling its duties, abiding by all relevant laws and regulations and providing employees with a safe and rewarding working environment. The Board considers the broader community, external and internal stakeholders, and industry partners in its deliberations.

Board composition

The Minister for Agriculture appoints Directors other than the Managing Director, who is appointed by the Board.

The Chair is appointed by the Minister and is not a nominated Director.

Five of the Directors are nominated by a selection committee established by the Minister in consultation with the National Farmers’ Federation and the Australian Chicken Meat Federation (nominated Directors).

The Minister appoints a nominated Director as the Deputy Chair.

The Board appoints the Managing Director and may appoint an Acting Managing Director.

Board appointments

The Minister for Agriculture appoints Directors other than the Managing Director, who is appointed by the Board.

The Chair is appointed by the Minister and is not a nominated Director.

Five of the Directors are nominated by a selection committee established by the Minister in consultation with the National Farmers’ Federation and the Australian Chicken Meat Federation (nominated Directors).

The Minister appoints a nominated Director as the Deputy Chair.

The Board appoints the Managing Director and may appoint an Acting Managing Director.

Board terms

Directors other than the Managing Director are appointed by the Minister and hold office for a
specified term not exceeding three years. The Managing Director is appointed by AgriFutures
Australia for a specified term. An Acting Managing Director may be appointed for a specified term.

Board expertise

The Directors are selected from a wide cross section of the rural business community and offer
expertise in production, processing, marketing, R&D administration, business management, social
sciences, technology transfer, environmental and ecological matters.

Maintaining ethical standards

All members of the Board agree to be bound by the principles contained in the Board Code of Conduct. The Board Code of Conduct is provided to all Directors as part of the induction process and provides guidance on their responsibilities, including how to act ethically, honestly, and with due care and diligence. Ethical standards at AgriFutures Australia are upheld with its values in mind: connectedness, networking, innovation, approachability, positive, professionalism, confidence and future-thinking.

Directors' reports

Accountability to industry
For the purposes of reporting on operations in 2019-20, AgriFutures Australia had two organisations prescribed by Section 7 of the Primary Industries Research and Development Act 1989 (PIRD Act). This requires AgriFutures Australia to report annually on its activities each financial period. This accountability runs parallel to AgriFutures Australia’s Annual Report to the Minister and the Parliament. Separately, it is relevant to note that the deer, honey bee and rice industries are nominated as representative bodies for the Primary Industry (Excise)
Levies Act 1999.

Formal reporting occurred as follows:

  National Farmers’ Federation

  Australian Chicken Meat Federation

AgriFutures Australia reported to these prescribed bodies during industry meetings being held for their own purposes.

AgriFutures Australia made no payments towards the costs of these meetings.

Board committees

During 2019-20, the Board operated one committee, the Audit Committee. The record of meetings is taken by the Executive Services Coordinator or General Manager, Corporate
Audit Committee

The Audit Committee from 1 July 2019 to 30 June 2020 comprised:

Chair: Dr William Ryan

Members: Mr Richard Clark, Mr Ian Henderson.

Audit Committee charter

The objective of the Audit Committee is to provide independent assurance and assistance, and to
make appropriate recommendations to the Board on AgriFutures Australia’s risk, control and compliance framework and its external accountability.

The Managing Director and the General Manager, Corporate, have a standing invitation to attend these meetings but are not members of the Committee.

During 2019-20, the Audit Committee had oversight of the completion of the statutory financial
statements and annual compliance statement, reviewed the Fraud Control and Risk Management
plans, reviewed the Accountable Authority Instructions, the Conflict of Interest Policy, and
the Audit Committee Charter, directed the internal audit function, and monitored the development
and implementation of new business systems and policies.

Date of Audit Committee Meetings 2019 – 2020

  Canberra ACT: 9 September 2019

  Wagga Wagga NSW: 22 November 2019

  Melbourne VIC: 20 February 2020

  Teleconference: 21 May 2020

Performance review

The Board is committed to continuous improvement and undertakes an evaluation of the Board’s performance and other Board responsibilities in each Board term, in accordance with the Board Performance Policy.

The last evaluation process was completed in June 2019.

The performance review for the Managing Director is conducted annually by the Board in accordance with the Managing Director Performance Management Policy.

Board remuneration

The remuneration for the 2019-20 financial year is as follows:

Chairperson = $60,980

Director = $36,590

Audit Committee Chair = $9,880

Audit Committee Member = $4,940

Board meetings

During 2019-20, the Board held four meetings:

  Canberra ACT: 10 and 11 September 2019

  Wagga Wagga NSW: 4 and 5 December 2019

  Wagga Wagga NSW: 11 and 12 March 2020

  Teleconference: 3 and 4 June 2020

AgriFutures Australia Board Director attendance for 2019-20

Inductions and continuing education of Directors

During the year, Directors participated in various industry conferences and workshops to further their knowledge of stakeholder issues and emerging sector issues. The Board also develops an annual program of briefings for Directors that are usually held in tandem with a Board meeting. Individual Directors may also participate in professional development programs with the Australian Institute of Company Directors and other entities as required.

Independent professional advice

Board members may seek independent professional advice at AgriFutures Australia’s expense as considered necessary to discharge their duties and responsibilities. Directors must obtain the approval of the Chair (which may not be unreasonably withheld) and the advice received made available to all Board members as appropriate.

Potential conflict of interest

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 discuss it at that meeting. 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 AgriFutures Australia’s auditors.

Members of the Audit Committee also provide an annual written declaration to the Board stating they do not have any conflicts of interest that would preclude them from being members of the Committee.

Related entity transactions

The decision-making process for AgriFutures Australia’s financial transactions, including related entity transactions, is guided by AgriFutures Australia’s Accountable Authority Instructions and Financial Policy and Procedures.

The Board and the Managing Director have powers conferred on them by the PIRD Act.
The Board has determined that the Managing Director shall, in accordance with the Accountable Authority Instructions and pursuant to Section 76(2) of the PIRD Act, conduct the affairs of AgriFutures Australia, subject to the following Managing Director limitations where Board approval is required:

  Approval of the Strategic R&D Plan, Annual Operational Plan and Budget, and Capital Budget

  Approval of all notifications to the Minister as required under section 15 & 16 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act)

  Purchases of capital items in excess of the total budget limit

  Write-off of non-recoverable debts above $50,000 for any given financial year

  Agreements that commit AgriFutures Australia to arrangements with other organisations/people

in the nature of joint ventures, partnerships, being an essential participant in a CRC, shareholdings in corporations or joining in the formation of a company

  Any contract where the total AgriFutures Australia commitment exceeds $650,000 other than a variation to a Board-approved contract where the variation is less than 20 per cent of the approved commitment and the variation does not materially affect expected contract outputs

  The commitment of AgriFutures Australia through contractual obligation for the commercial use of, or exploitation of, its intellectual property

  Material changes in accounting policy within the control of AgriFutures Australia and consistent with Finance Minister’s orders

  Approval of the Conflict of Interest Policy

  Media releases that comment or provide an opinion on AgriFutures Australia as an organisation

  Any other limitations notified in writing to the Managing Director by the Board.

All AgriFutures Australia staff are bound by its Financial Policy and Procedures and related Accountable Authority Instructions.

The Accountable Authority Instructions detail powers delegated to AgriFutures Australia staff under sections 90 and 91 of the PIRD Act 1989. The instrument limits financial authority as follows:

  The financial liability into which AgriFutures Australia is entering must be consistent with strategic, operational and capital plans

  The limits designated by approved budgets for which delegates are responsible (for example, program/ cost centre budget, etc.).

AgriFutures Australia’s Conflict of Interest Policy applies to all staff.

Agreements to conduct research for the organisation

AgriFutures Australia uses a standard form contract for R&D projects (research agreement), which sets out the terms on which AgriFutures Australia will engage successful applicants to carry out the project. The research agreement has been developed to reflect AgriFutures Australia’s
statutory and other responsibilities in funding projects.

AgriFutures Australia will generally not negotiate substantive amendments to any clauses of the agreement unless:

  It is satisfied that exceptional circumstances exist that require amendment to the standard form

  The applicant completes a statement of noncompliance for each of those clauses.

Consultancy services and selection of suppliers

The consultancies used by AgriFutures Australia during 2019-20, the nature of their work, and the cost of their services are listed in Table 18/1.

Purchasing procedures

AgriFutures Australia procures goods and services ranging from low-value petty cash items to high-value goods and services that may involve complex tendering and contracting processes. Therefore, purchasing procedures will vary according to the value and complexity involved in
each particular purchase. AgriFutures Australia expects its staff to adopt a simple, straightforward approach to the purchase of low-value goods and services and use more complex methods to manage the risks involved in major purchases.

The following principles are applied for all transactions:

  Expenditure is to be appropriate for the purpose (AgriFutures Australia funds must be used solely for the purposes of AgriFutures Australia, in line with the AOP)

  Purchases should represent value for money

  Procurement processes should be conducted in an efficient, effective and ethical manner. They should be transparent and publicly defensible

  Staff must not improperly use their position to gain an advantage for themselves or someone else. Staff must declare any real or perceived conflict of interest

  Procurement should be conducted in accordance with the procedures outlined in the AgriFutures Australia’s

Procurement Procedure, with particular attention paid to the requirements associated with various
procurement thresholds and methods.

Indemnities and insurances for Directors and officers

Since February 1999, AgriFutures Australia has been a member of Comcover, the Australian Government’s self managed fund for insurance cover. The insurance covers Directors and officers against various liabilities they may incur in their capacity as officers of AgriFutures Australia.

The Comcover insurance contract prohibits disclosure of the nature and limit of the liabilities covered and the amount of AgriFutures Australia’s membership premium.

No insurance claims were made during 2019-20. During August 2018, the Board executed an Access and Indemnity Deed. The Deed enables new Directors as they are appointed and designated senior officers to be indemnified from liabilities they may incur as Directors and officers of AgriFutures Australia, as permitted by the PGPA Act.

Risk management

The AgriFutures Australia Risk Management Policy and Framework 2020-21 supersedes the AgriFutures Australia Risk Management Plan 2017-20. AgriFutures Australia’s Risk Management Policy and Framework is assessed annually by the Audit Committee and Board to ensure all risks are reviewed where there have been changes in internal or external operating environments
and to consider any emerging risks. The control framework comprises a risk assessment methodology to identify risks to the organisation with relevant mitigant strategies. Management also reports to each Board and Audit Committee meeting on the status and progress of the management of any key risks.

In 2019-20, AgriFutures Australia conducted a series of risk workshops with a specialist risk management consultant to identify and review major strategic and operational risks to the organisation. The review of these risks is a constantly ongoing process to ensure risk identification management and mitigation remains current and relevant to AgriFutures
Australia and its stakeholders.

The Audit Committee oversees preparation and implementation of AgriFutures Australia’s risk
management initiatives.

Fraud control

AgriFutures Australia’s Fraud Control Plan is approved by the Audit Committee and Board.

The Managing Director is satisfied that:

  A fraud risk assessment and fraud control plan have been prepared in compliance with the
Commonwealth’s Fraud Control Guidelines as set out in AgriFutures Australia’s Fraud Control Plan 2018–20

  Appropriate fraud prevention, detection, investigation and reporting procedures and processes are in place as specified in AgriFutures Australia’s Fraud Control Plan 2018–20

  One incident of attempted fraud was reported in 2019-20.

Accordingly, the Board is satisfied that AgriFutures Australia’s fraud control policies, procedures and initiatives
are in accordance with the Commonwealth’s Fraud Control
Guidelines.
The Audit Committee oversees preparation and
implementation of AgriFutures Australia’s Fraud Control
Policy.