Directors' report & governance framework
The Directors of Landcare Research New Zealand Limited (Manaaki Whenua) are pleased to report that the company fulfilled its obligations under the Crown Research Institutes Act 1992 for the year ended 30 June 2006. The disclosures relate to Landcare Research New Zealand Limited and its subsidiaries.
Principal Activity
Landcare Research and subsidiaries (the “Group”) provide scientific research, consultancy services and technology that contribute to sustainable management of environmental resources.
Governance Framework
The Ministers of Finance and Crown Research Institutes each hold 50% of the company’s shares on behalf of the public. The shareholding Ministers appoint the Chair, Deputy Chair, and the five other directors to the Board of Manaaki Whenua. All directors are non-executive. Board decisions are made collectively – individual directors have no separate governing role. The Board evaluates its performance annually using templates provided by the Crown Company Monitoring Advisory Unit (CCMAU).
Board Responsibilities
Board responsibilities include providing strategic direction, selecting, evaluating and recommending remuneration for the Chief Executive, succession planning for and appointment of the new Chief Executive, formulating policy, managing risk, ensuring legislative compliance, monitoring performance (economic, environmental and social), and communicating with the shareholding Ministers and other stakeholders.
Ultimate responsibility for Manaaki Whenua lies with the Board but, in effect, senior managers share responsibility for managing the company. The parent company Board appoints senior managers to act as directors of subsidiaries, and monitors the subsidiaries’ performance.
Planning and Reporting
In May and June each year, the Board negotiates a Statement of Corporate Intent (SCI) and a Strategic Business Plan for the next financial year with the shareholding Ministers. The SCI sets out the company’s core business, performance measures, and targets (financial and non-financial) for the coming year in accordance with the Operating Principles of the CRI Act (1992). The SCI is tabled in Parliament, and is a public document. All CRIs must produce a SCI, then report performance against the stated measures and targets.
All CRIs must produce an annual report by 30th September. The reports are tabled in Parliament, and each CRI’s performance is reviewed by the Parliamentary Select Committee for Science and Education. The Strategic Business Plan, which contains the key business initiatives and more detailed financials, is confidential to the CRI and shareholding Ministers.
Planning and reporting framework
Ethical Standards
The Board regularly monitors whether the directors, managers, and staff maintain high standards of ethical behaviour, and generally act as good corporate citizens.
Operating Results
Group Revenue for the year increased to $51.616 million from $47.930 million in the previous year.
The Group Operating Surplus before investment project expenditure, interest and income tax increased to $1.252 million from $0.886 million in 2004/5; and the consolidated Net Surplus after tax attributable to parent company shareholders was $656,000 compared to $10,000 in 2004/5.
| Appointed | Term Expires | Board Meetings attended (12) |
Audit Committee Meetings attended (2) |
Remuneration 2005/06 |
Remuneration 2004/05 |
|
|---|---|---|---|---|---|---|
| Graeme Boyd | 01-07-05 | 30-06-08 | 12 | 2 | $20,242 | - |
| Denise F Church | 01-10-01 | 30-06-07 | 12 | 2 | $20,242 | $18,818 |
| Rob GM Fenwick | 22-07-98 | 30-06-07 | 11 (Chair) | 2 | $39,151 | $36,637 |
| Alistair Lawrence | 12-06-04 | 30-06-07 | 10 | 2 | $20,242 | $18,818 |
| Ann J Urlwin | 02-07-01 | 30-06-07 | 12 (Deputy) | 2 (Chair) | $25,636 | $19,818 |
| William S Te Aho | 30-05-03 | 30-06-09 | 10 | 1 | $20,242 | $17,818 |
| Jill J White | 14-07-03 | 30-06-09 | 12 | 2 | $20,242 | $17,818 |
Pursuant to S140(2) of the Companies Act 1993, directors have declared they should be regarded as having an interest in any contract that may have been made with the entities listed below by virtue of their directorship or membership of those entities:
| G Boyd | Bay of Plenty Polytech, Director | Boyd Insight Ltd, Director |
| DF Church | World Wide Fund for Nature, Trustee ERMA NZ Ethics Advisory Board, Convenor |
Wellington Zoo Trust, Trustee |
| RGM Fenwick | Living Earth Limited, Director Television New Zealand Limited, Director NZ Business Council for Sustainable Development, Chair |
World Wide Fund for Nature, Trustee Order of St John, Chancellor UNESCO Decade for Education for Sustainable Development, Chairman Waihere Fresh Seafoods Limited, Director |
| AR Lawrence | Haines NZ Ltd, Director Antipodes Capital Limited, Director Antipodes Consult Limited, Director |
Takeovers Panel, Member JA Hellaby Endowment Fund, Trustee |
| AJ Urlwin | Airways Corporation of New Zealand Limited, Deputy Chair |
New Zealand Blood Service, Director New Zealand Cricket Inc., Director New Zealand Domain Name Registry Ltd, Chair |
| WS Te Aho | Indigenous Corporate Solutions Ltd, Director Kapa Haka International Ltd, Director Kokakotaea Forestry Corporation Ltd, Deputy Chair |
Manaakitanga Aotearoa Trust, Deputy Chair Whakarewarewa Village Charitable Trust, Chair |
| JJ White | Manawatu-Wanganui Regional Disaster Relief Fund Trust, Chair |
Lottery Whanganui-Manawatu Community Committee, Presiding Member |
No directors acquired or disposed of equity securities in the company during the year; and the Board has received no notices from directors of the company, requesting to use company information received in their capacity as directors which would not otherwise have been available to them.
Directors’ and Officers’ Liability Insurance
The Group has entered into a Deed of Indemnity that includes insurance to cover Directors so they do not incur any monetary loss in carrying out their duties. Certain actions are excluded— for example, penalties and fines imposed in respect to breaches of the law and liabilities arising from any activity not conducted for the benefit of, or on behalf of, Manaaki Whenua or its subsidiaries.
Donations
The group has made various donations totalling $1,000 during the year ($1,000 in 2004/5).
Auditors
Audit New Zealand has been appointed as the agent of the Auditor General in accordance with S21 of the Crown Research Institutes Act 1992.
Remuneration paid to Audit New Zealand in 2005/6 totalled $97,000 ($68,000 in 2004/5) for audit work, plus $1,000 for other services ($33,000 in 2004/5).
| Employee Remuneration | Number of Employees | |
|---|---|---|
| 2005/06 | 2004/05 | |
| Total cost to the Company | ||
| $310,000 - $319,999 | - | 1(*) |
| $300,000 - $309,999 | 1(*) | - |
| $270,000 - $279,999 | 1 | - |
| $220,000 - $229,999 | 2 | - |
| $180,000 - $189,999 | 2 | 1 |
| $170,000 - $179,999 | - | 1 |
| $160,000 - $169,999 | - | 2 |
| $140,000 - $149,999 | 5 | 2 |
| $130,000 - $139,999 | 1 | 2 |
| $120,000 - $129,999 | 4 | 2 |
| $110,000 - $119,999 | 6 | 4 |
| $100,000 - $109,999 | 7 | 5 |
(*) CEO of Landcare Research New Zealand Limited. A new CEO was
appointed with effect from 25 July 2005.
Compensation paid or payable to 16 persons who ceased to be employees during the year totalled $658,000. Five are included in the table above.
Signed, for and on behalf of the Board
RGM Fenwick
Chairman of Directors
23 August 2006
AJ Urlwin
Director
23 August 2006