2014 Governance Review Outcomes

The members of the Taskforce were: Steve Miles (Convenor), David Minty, Martin Mulcare, Ian Pollard, Chao Qiao, Graham Rogers, Helen Rowell and David Ticehurst, with Anne Peters providing HQ support.

The Taskforce’s Terms of Reference were:

“Review the systems that the Institute uses to engage with its members in the governance of the profession and make recommendations to improve member involvement, transparency and accountability of governance as well as communication with members in these areas. Systems include the election and terms of the President, Vice Presidents and directors, the filling of casual vacancies, the opportunities for re-election, as well as the appointments to committees.”

In addition to the Taskforce members reviewing corporate practice in Australian not-for-profit organisations and listed entities, as well as the practice of actuarial and non- actuarial professional associations, Institute Members were consulted through focus groups, surveys, online discussion forums on the Institute’s website and various LinkedIn groups and Insights sessions.

In September 2014, the Taskforce presented the following final recommendations to Council:

RECOMMENDATIONS ON COMMUNICATION

1. More transparency in Council operations: A reasonably large number of comments were received about Council and committees being a ‘closed club’. The solution is for Council/the Institute to be much more open, transparent and inclusive than it is currently perceived to be. This will require a considered and comprehensive communication/engagement strategy to be developed and effectively implemented. There is work available from other professions that can provide a guide for Council to develop this strategy.

2. Publication of Council agendas and meeting summaries: The recent move by Council to issue a summary note of Council meeting outcomes was well accepted by members and should be continued. 58% of survey respondents thought it was important to be informed of the outcomes of Council meetings and a further 40% thought it was interesting. Council should consider posting meeting agendas and other items that lead to more transparency.

3. Establishing a discussion forum on issues for consideration by Council: It should be noted that the Taskforce found that the discussion forum software used by the Institute has limitations. These limitations were due to the customised database that the Actuaries Institute uses, as well as the website software and support. This cannot be regarded as satisfactory. Council should establish a discussion forum on issues, but at this stage there is no ability to let members know when there is an update.

4. Members should have the right to compel Council to review an issue: This seems preferable to having an Extraordinary General Meeting. A threshold of 50 Voting Members ‘petitioning’ seems like a realistic level to require such a review. A published response to all members within three months of such a ‘petition’ could be the required outcome.

5. Clarify the role of Council and Committees: Whilst Terms of Reference for Council and committees do exist, they are written more from a compliance perspective than a performance perspective. Further information on what committees do can be found in newsletters. Each committee should have a short statement of what has been done over the past year and what will be done over the next two years; something that would inspire members to get involved.

RECOMMENDATIONS ON ENGAGEMENT

1. Voting by Associate members: Associate members should have the right to vote for Council members, meaning that all members who can now call themselves ‘actuaries’ will have a vote. This would mean that Associates would account for 26% (721 Associates and 2007 Fellows at 8 July 2014) of members eligible to vote. It would be logical to also allow Associates to be Council members, but there is not a strong level of support for this and therefore the Taskforce has not made this recommendation.

2. Access to committee membership: There should be open access to membership of all committees and this should be promoted to members. The Actuaries Institute should continue the recent practice of advertising for committee vacancies as they arise. There is some feeling that committee membership is not open. Members also feel that some committees are too hard to join and also feel that they need to be invited to join committees and Council. The target time on committees is three years, but many committee members have served longer than this. Preference should be given for new members in these circumstances. The role of the Nominations Council Committee should be promoted in this renewal process, as its existence/purpose does not seem to be well understood.

RECOMMENDATIONS ON GOVERNANCE

1. Council terms: Council members should have a three year term and should be able to stand for re-election for a maximum of one further consecutive term. A three year term is the very clear preference of members now and is the most common term for overseas actuarial bodies.

2. Presidential trio: The Presidential trio system should continue with the Vice President being elected by Council. The trio system was supported in focus groups, discussion forums and the member survey. It is also the common system used by overseas actuarial bodies, although the trio is usually the President elect, President and Past President. Paradoxically, there is a similar level of support for allowing a President to stand for re-election even though this does not fit with the trio system. Whilst a two year presidency would be more consistent with Australian corporate practice, it is not the general practice of other actuarial bodies or other professions. A two year presidency is also a significant work load, especially if there is a two year Vice President lead-in period. 64% of survey respondents believed there should be a lead-in period for the President.

3. 10.Council composition: There should be three Council members elected each year, making a total of nine elected members (a reduction from the current twelve), together with the members of the Presidential trio who are not Council members.

4. President as Council member: If a member of the Presidential trio is not on Council at any time during his or her term, then he or she should be co-opted as an additional member of Council. This is the usual practice in overseas actuarial bodies and supports the election of three Councillors each year.

5. Non-members on Council: A further one or two positions on Council could be appointed by Council from outside the profession. The term of these appointments would be for twelve months, with the option for Council to renew each appointment up to a total term of six years. This would help extend the influence of the profession, as well as enable Council to fill skill gaps. 28% (close to 30%!) of members thought this was a bad idea, so this is still a controversial issue. This practice is, however, quite common in larger not-for-profits.

6. Casual vacancies on Council: Casual vacancy rules should not impact on the number of Councillors elected each year. The Taskforce did not ask members how to deal with casual vacancies as it was felt that the answer would be dependent on other issues. On balance, the Taskforce recommends that Council fill casual vacancies for the remaining term of the vacating Councillor, first considering the unsuccessful candidates from the most recent Council election. Having an election to fill a casual vacancy would mean having a variable number of Councillors elected each year.

Council is currently considering the Taskforce’s recommendations in further detail as part of its review of the Institute’s 2015-17 strategy. Interested to know more? Like to indicate your preference on each recommendation? Check out the Taskforce’s website page.

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