AWI still yet to complete its EY recommendations

Australian Wool Innovation EY recommendations yet to be completed

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AWI chief executive Stuart McCullough said the organisation was working hard to complete the remaining four recommendations.

AWI chief executive Stuart McCullough said the organisation was working hard to complete the remaining four recommendations.

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It's been two years since a review of AWI's performance and governance was released and the industry is still waiting for four recommendations to be complete.

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It has been two years since the review of Australian Wool Innovation's performance and governance was released.

The peak research, development and marketing body has until November to fulfil all of the review's recommendations, and while the majority are complete, it is some of the most critical changes it is yet to get across the line.

The review was conducted by Ernst & Young (EY) in 2018 and 82 recommendations were released with the final review on July 9, 2018.

AWI has actioned 78 out of 82 recommendations and the organisation's chief executive Stuart McCullough said the 99pc completion rate was a good result.

"We must remember we are 99pc complete with those recommendations, are we really going to complain about the 1pc?" Mr McCullough said.

The four recommendations that are yet to be implemented include putting a 10-year cap on its board directors' tenure, as well as reporting on the performance of the board.

Other recommendations yet to be acted on include developing a 10-year wool strategy, and exhibiting behaviours of good governance such as accountability and transparency.

Mr McCullough said to make constitutional change and update board tenure requirements, a constitutional vote and the stamp of approval by shareholders needed to occur and this had to be done when all were present.

"That's a process; we have one AGM (annual general meeting) a year and unless we hold an EGM (extraordinary general meeting), which is costly and disruptive, we have to wait to take it to the AGM," he said.

In the period since the recommendations had been released, AWI had already held two AGMs, while one EGM, which was planned for March 2019 to specifically discuss and vote on the issue, had been cancelled.

When the EGM was cancelled, AWI chairman Colette Garnsey said the board tenure issue would instead be resolved on, or before, its 2020 AGM.

Mr McCullough said this was still the plan.

When asked whether AWI was hesitant to implement the board tenure recommendation, he said they weren't, but that they were working with the industry consultative committee (ICC) to come to a resolution.

"And we're not about to make these decisions without support from the industry," he said.

When it came to improving company culture, Mr McCullough said he didn't think AWI had a culture problem prior to the EY review being conducted.

"That's someone's view of where we were and I don't know who is the objective judge of good and bad culture," he said.

"I know how this company's run, how we look after people and how we retain our staff.

"I'm very confident that the culture was good and it's a lot better now."

He said AWI was working with the Department of Agriculture, Water and the Environment (DAWE) to get the tick of approval on this recommendation.

"Who is the boss of culture? We don't know," he said.

"I'd like someone to put their hand up and say they'll be the judge of this."

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Mr McCullough said the other two recommendations came down to timelines and documentation that were out of AWI's control.

In terms of reporting on board performance, he said this item couldn't be ticked off until the 2019-20 Annual Report was released next month.

But he said he believed AWI had already been transparent enough about its board's performance prior to the EY review.

"The board's performance has been measured for the last 10 years, it just hasn't been put in the annual report," he said.

When it came to developing a 10-year strategy, he said AWI's Woolgrower Consultation Group was the principal oversight body for the development of the strategic plan, known as 'Wool 2030 - A strategic plan for Australian woolgrowers'.

He said this was on track to be unveiled in November this year.

Mr McCullough said AWI was working closely with the DAWE to complete the final four recommendations.

"They're being very cooperative and very good with us on these last few things," he said.

"We're not getting too much angst on the 1pc of 82 recommendations that are left.

"We said we'd work through this and we will.

"I can assure you the company is working extremely hard to complete these."

A DAWE spokesperson said it would be leaving the implementation of the recommendations in the AWI board's hands.

"AWI advises that it expects to have delivered all 82 recommendations at or before its AGM in November 2020," the spokesperson said.

You can view AWI's progress of implementation here.

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