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Beyond the Bale : September 2018
UPFRONT 7 AWI’s latest three-year review of performance has stated that: AWI has performed well in many regards, but, as with most organisations, many opportunities exist for its improved performance in the future. AWI is looking to implement the review’s recommendations that will help the company deliver better results for woolgrowers. INDEPENDENT THREE-YEAR REVIEW OF PERFORMANCE BACKGROUND AWI has an obligation through its Statutory Funding Agreement (SFA) with the Federal Government to undergo an independent re- view of performance (ROP) every three years – and report the ROP to wool levy payers and the Government prior to each WoolPoll. This year, the Government took the lead in contracting and managing the independent consultant undertaking the review (Ernst & Young). The review also considered some additional matters that were raised by industry and government. AWI welcomed this expanded review and fully cooperated at every stage to ensure the consultants had access to all the informa- tion required to make their recommenda- tions. Ernst & Young’s thorough review of AWI’s performance and governance for the period 2015-2018 resulted in a 500-page report that was released on 9 July. In summary, 82 recommendations were suggested, with the areas of monitoring and evaluation, consultation and gover- nance being the focus. The recommenda- tions range in levels of importance from 'mandatory', 'critical' and 'recommended' and provide the company with timing suggestions for completion helping to pave the way for greater consultation, transparency and accountability. REPORT WILL BENEFIT AWI AND WOOLGROWERS In response to the report, AWI CEO Stuart McCullough said the assessment of how AWI was performing against its responsibilities will be of great benefit to AWI in refining its processes and approach going forward. “A review of performance is a normal part of the WoolPoll cycle that AWI goes through every three years to inform woolgrowers prior to the WoolPoll vote. It’s a very normal part of our life,” Mr McCullough said. “The report is complimentary on many of the things that we do, such as our strong reputation for marketing activities, but Ernst & Young’s aim was to identify any problems with the business and provide suggestions on how we can improve the business, and that's exactly what they've done. “AWI acknowledges there are areas where we can enhance the way we operate and we look forward to improving delivery of our services to Australian woolgrowers. The report provides a detailed roadmap to assist that process.” Mr McCullough noted that AWI’s review of performance process is unique in many ways. “For woolgrowers, the report means that their company, AWI, is being well scrutinised every three years and they get to see those results and they get to judge us on our worth,” he said. “So I think that it evidences to woolgrowers that the company is been well looked at. There are many things that we've done right, and things that we can do better have been identified and will be addressed in due course.” The report highlighted that AWI’s employees are of a high calibre, with a strong commitment in delivering high quality innovations and experience that spans the entirety of the wool industry value chain. OPERATIONAL RECOMMENDATIONS The report’s recommendations can be broken into two main parts: the operations of the company and the Board. From an operational point of view, Ernst & Young identified two key areas that could be improved: one is measurement and evaluation, and the other one is consultation. “We acknowledged at the beginning of the review that measurement and evaluation was a bit of an issue for us,” Mr McCullough explained. “Because we don't sell anything, it’s often hard to give to woolgrowers tangible figures of return on investment, so that's where we've got to spend some more energy and time. We need people collecting data in the northern hemisphere on a constant basis and analysts back here extrapolating that into terms that woolgrowers can understand.” Regarding consultation, the review of performance acknowledged that AWI has increased its number of engagement, consultation and communication initiatives since the last strategic planning period, and that the addition of these methods has strengthened AWI’s ability to connect with wool industry stakeholders. “However, the report also said that more needs to be done by AWI to ensure more effective consultation is undertaken with industry representative organisations and other stakeholders,” Mr McCullough said. PROGRESS OF IMPLEMENTING RECOMMENDATIONS Mr McCullough said that, from an operational and Board perspective, AWI intends to expeditiously adopt key recommendations that will help to enhance transparency and accountability and consultation mechanisms with its shareholders and stakeholders. “Ernst and Young did a good job with this report and they have provided us with the timings that they'd like to see the recommendations implemented,” he explained. “We can simply accept many of the recommendations outright, but there were some that warrant some more thought and potentially might require constitutional change which we've got to put to a vote of all shareholders, so there's a bit of road to go yet. But certainly the ones that we can tick off quickly we will, and we'll work on the others to get them delivered in due course.” AWI is creating a dedicated spot on its website at www.wool.com/ROP that will inform woolgrowers on the progress/status of implementing the report’s recommendations. MORE INFORMATION • Woolgrowers will receive a summary of the ROP report with their WoolPoll Voter Information Kit. • You can download the full report and a summary report from www.wool.com/ROP • Hear from AWI’s CEO Stuart McCullough speaking about the report’s recommendations and the next steps for AWI in Episode 49 of AWI’s The Yarn podcast at www.wool.com/podcast
In the Shops - September 2018