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Establishment of CRC Board

Role of the Board

The role of a CRC Board is to provide leadership, strategic guidance and oversight in relation to a CRC bid and ensure good governance practices are adopted.  To help with this process it is recommended that a Board Charter (along the lines of Appendix #[PD1]  is adopted).

 

Establishment of Committees

If considered necessary, the Board may establish Committees to help it in managing the governance processes. Some Committees may be specified in the Company Constitution

Examples of Committees are:

·        Audit & Risk Committee - to assist and advise the Board in discharging its responsibilities in relation financial and risk matters.

·        Nominations & Remuneration Committee - to assist and advise the Board in discharging its responsibilities in relation to the composition and performance of the Board and its Committees as well as remuneration and incentives for key executives or participants in the CRC bid.

·        Research & Education Committee – to provide objective review and assistance in developing the CRC’s education, training and research programs

·        Innovation/Commercialisation Committee - to provide advice and connections for commercialising research from the CRC.

The Rozetta Institute has examples of Charters for Board Committees that can be provided on request.

 

Corporate Plan | Meeting Dates

It is important that a corporate plan is developed early in the establishment process to help manage the rhythm of meetings and to help identify responsible persons who have the ability to meet the corporate workload relating to the Company.

The corporate plan will need to be developed having regard to legal requirements, including:

(a)    the timing of annual general meetings and filing of financial statements and annual reports;

(b)    election and re-election of responsible persons;

(c)    appointment of auditor;

(d)    aggregate remuneration arrangements for the board;

The corporate plan will include dates of Board and Committee meetings as well as the annual general meeting. As a general rule, Committee meetings should be held in advance of any Board meeting to allow the Committee to make recommendations to the Board or to report to the Board on the workings of the relevant Committee.

 

Board Remuneration

It is common practice amongst CRCs to remunerate the Independent Chair and Independent Directors of a CRC. The CRC Constitution will include information on the approach to Board Remuneration including director eligibility and participation in Committees.

Co-operative Research Australia (CRA) conducts benchmarking of CRCs and can provide up to date information on board remuneration arrangements across CRCs. Board remuneration can vary widely between CRCs reflecting the disparate nature of CRCs therefore the CRC Remuneration Committee should consider what is appropriate for their CRC.

A member resolution is required to establish the total aggregate ceiling/maximum budget for remuneration. Specific details about board remuneration (Chair, Director, Committee) can then set by the remuneration committee and approved by the CRC Board once established within the boundary of the total aggregate/maximum budget.

 

Board Composition

The Board of the Company determines its size and composition and the membership and role of Board Committees. The size and composition must be approved by the Rozetta Board in advance and then should be formalised in the Constitution.

The Constitution should also set out the requirements for director appointments, including specified terms and qualifications.

To help the Board determine its size and composition a skills matrix should be prepared based on the Company’s objectives, strategic objectives and any specific membership requirements. 

A skills matrix can help to map out skills and proficiency levels of Board Members, managers and staff. It takes the form of a visual framework that can help organisations make more strategic decisions on talent. In general, it provides a comprehensive grid that captures skills information for effective management, planning and monitoring across various levels.

This skills matrix can also be used for annual reviews to help identify any skills gaps.

An example of a skills matrix is set out in Appendix #[PD2] .

 

Appoint Chair

The Chair is a critical appointment. A Chair will need to be identified and should ideally have had prior experience as a Chair of a CRC or not for profit entity or is an experienced director.

The Chair is accountable to the board for the performance of his/her role. The Chair also has an important role in:

·        representing the board in its accountability to members and shareholders including at, and between, member and shareholder meetings;
cooperating with the CEO and representing the public face of the organisation to its broader stakeholders and the community.

An example position description for Chair can be found on the AICD website (https://www.aicd.com.au/content/dam/aicd/pdf/tools-resources/director-tools/individual/position-description-for-a-chair-director-tool.pdf)

 

Appoint Directors

The CRC Board is a vital part of the governance for the CRC.  In addition to legal, financial and governance responsibilities the Board is also pivotal in ensuring that the CRC meets its objectives and obligations under the Commonwealth Grant Agreement and Partners (or Participants) Agreement.

The CRC should appoint a Board Nomination Committee to conduct the selection process of Directors in accordance with the appointment principles the CRC has established in its Constitution or in other policy documents.

CRC Constitution will define the structure of the board and the process for appointing Directors. The CRC members that are eligible to vote on the appointment of Directors will need to be informed of the selection process for board directors.

The CRC should provide information to members on the appointment process, the process for recommending directors, and the required board skills matrix outlining the skills and expertise the CRC is seeking.

As Board Member appointments are required to be voted on by members the nominations process should be commenced several months before the AGM to allow sufficient time for nominees to be submitted to the Nominations Committee, interviews to be conducted, and the CRC Board to prepare recommendations for appointment to be included in the Notice of the AGM.

 

Responsible Persons

The term ‘Responsible Person’ refers to someone responsible for the governance of the Company.  Responsible People or Directors are important because they make decisions about how the Company is run.

You must ensure that Responsible People who are appointed to the Company are suitable and are aware of their legal responsibilities and duties. This includes:

·        act with reasonable care and diligence

·        act honestly and fairly in the best interests of the Company and for its objectives

·        not misuse their position or information they gain as a Responsible Person

·        disclose actual or potential conflicts of interest

·        ensure that the financial affairs of the charity are managed responsibly, and

·        not allow the charity to operate while it is insolvent.

The ACNC publishes a number of useful guides and checklists for Responsible Persons which set out governance standards and checklists for directors (see ACNC website).

 

Documentation for Responsible Persons

Directors can be appointed by directors or members (in general meeting) and their tenure will be subject to rotation rules set out in the Constitution as well as good governance practices.

Directors will generally be required to sign a letter of appointment as well as a consent to act and must declare any actual, potential or perceived conflicts of interests. These declarations must be kept up to date and will be included in a register maintained by the company secretary.

Subject to the Constitution, the Company may enter into a deed of indemnity and access with directors as permitted by law. This document should be drafted by a lawyer.

 

Fit and Proper Person Declaration

At appointment, and annually prior to the AGM, all Directors are required to provide a ‘Fit and Proper Person’ declaration in accordance with the Commonwealth Grant Agreement, and the CRC’s Constitution (where defined). See Appendix # for a Fit and Proper Person template.[PD3] 

 

Board Charter and Terms of Reference

It is good practice to develop a Board Charter and Terms of Reference for use by the CRC Board.

The Board Charter defines the respective roles, responsibilities and authorities of the board of directors (both individually and collectively) and management in setting the direction, the management and the control of the organisation.

The Terms of Reference or Committee Charters establishes the details any specific delegated authority that the board or committee have when overseeing a delegated area of responsibility.

Examples of Board Charter and Committee Charter/Terms of Reference are available on request.

 

Board Skills Matrix

The CRC is required to appoint a Board in line with DISR CRC Grant Guidelines providing a breadth of skills, experience and domain knowledge.

A skills matrix is a way to assess the collective coverage of Director Skills and Experience to assist identifying any experience gaps that would assist the Board in governing the entity. It can also be used to communicate transparently to members and other stakeholders about the Boards’ capability.

Along with ensuring the Board representation provides deep knowledge, experience and understanding of the particular domain the CRC is working in, collectively the Directors should have skills and experience or access to some of the the following key skills:

  • corporate governance, including in the not-for-profit sector
  • strategy development
  • IP management, commercialisation and technology transfer
  • capital raising and business development
  • technology, IT and cyber security.
  • government relations (federal, state and/or territory)
  • industry/academic collaborative research and development
  • higher education, training
  • accounting, audit, and financial management
  • communications, marketing and media

 An example skills matrix is provided in appendix #[PD4] . The matrix can be used as a self-assessment tool by current and potential directors.


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