EGYPTIAN INSTITUTE of DIRECTORS “Getting Started” Seminar Cairo

1. EGYPTIAN INSTITUTE of DIRECTORS“Getting Started” SeminarCairo Ian T. Dunlop Governance & Sustainability Advisor Sydney, Australia 19th April 2004

2. Global Driving Forces

3. World Population Source: UN 1998 World Population Estimates

4. Poverty & Inequality enjoy 80% of World GDP Less than A$2 per day A$2-4 per day World Population = 6 billion

5. Drivers • Population Growth • Poverty & Inequality • Liberalisation • Globalisation • Technological Change • Sustainability

6. Major Discontinuity • Social & Political • 11th Sept 2001 • Afghanistan, Iraq, Bali • Israel / Palestine • Economic - future of governance? • Outsider - Anglo-Saxon • Insider - Europe / Japan • Hybrid - Asia • Africa, Middle East, China & India?

7. The Regulatory Pendulum Self-Regulation Prescription Prevention Realistic Regulation Performance

8. Corporate Governance Conventional definition: The system by which organisations are directed & controlled

9. Corporate Governance Practical definition: The use and abuse of power “Power tends to corrupt, absolute power corrupts absolutely” Lord Acton 1887

10. The Governance Objective Performance without abuse of power

11. IoD - Institutional Aspects • IoD does more than corporate governance • Proactive performance focus • not reactive legal constraints • Practical emphasis • Sustainable delivery • Local commitment

12. IoD - Vision Professionalism in Directorship: • maximising the leadership contribution of boards of directors to: • poverty alleviation • national economic and social well-being • wealth creation • with the highest standards of ethics & corporate governance • with trust and integrity

13. IoD - Mission To be the leading professional organisation for Egyptian directors

14. IoD - Internal Governance • Not-for-profit, independent of commercial interests • Board comprised of: • high profile directors & professionals • with integrity & commitment to IoD objectives • without conflict of interest • acting in a voluntary capacity • Corporate sponsorship provided: • independent of governance involvement • because sponsor believes in value of IoD initiative • corporate benefit arises from publicity & association with IoD • Even-handed with all sponsors: • avoiding over-commitment to any one organisation

15. IoD - Key Roles Research & Policy Development Representation & Advocacy Information Member Services Education & Professional Development Business Systems Networking

16. IoD - Point of Difference • Represents directors as individuals • not corporate entities • Focus on director issues • not management issues • they are different • Intellectual powerhouse on director issues • the leading policy developer & advocate • Provides education based on intellectual leadership

17. Membership • Individual members • not corporate membership • Typical membership categories: • Associate • Graduate • Member • Fellow • Set realistic membership targets • public, private & not-for-profit sectors • Emphasise member retention • far cheaper to retain an existing member than recruit a new one

18. Understand the director market • Directors are: • from diverse backgrounds • practical, demanding, not academic • do not suffer fools gladly • always short of time ! • Thus IoD activities must be: • relevant • to the point • high quality • devoid of technical jargon • Interactive, building on experience of members

19. Education & Prof. Development • Leverage off intellectual leadership on director issues • Educational programs, conferences, seminars to: • develop skills and knowledge of directors to improve company and board performance • increase personal and professional development • Adopt clear educational philosophy: • ideally principle-based • avoid heavy numeric analysis • Package into high quality consistent products: • content, delivery, presentation, venue • top quality tutors

20. IoD is a Business • Requires: • sound, dedicated management • comprehensive Business Plan • quality services & delivery • This is not a benevolent activity !

21. Funding • Initial: • national governments, regulators, stock exchange • international agencies • corporates • Ongoing: • membership • training courses • events

22. itdunlop@ozemail.com.au

23. Typical Organisation IoD Board of Directors President Executive Director Policy Committees Accounting & Financial Corporate Governance Corporations Law Environment Annual Conference Education Tax & Economics Executive Functions Education Finance Information Professional Development Research & Policy Membership

24. Policy Committees • Policy Committees should be developed gradually comprising: • leading directors, professionals & technical specialists • acting in a voluntary capacity • Policy positions developed by committees are submitted to IoD Board for approval before advocacy

25. Service Development Cycle ICD Board of Directors Membership Annual Policy Platform Establish Core Director Issues Core Annual Education Review Programs Research & Policy Education Information PD Package Advocacy Package Database Member Programs

26. Initial Priority Activities • Research & Policy, Advocacy • Education & Professional Development • Information Services Provide a limited range of quality services initially to gain credibility, initial membership & start cashflow. Then expand as experience & resources dictates. Walk before you run !

27. Research & Policy • Identification of issues impacting on effective conduct of business, particularly corporate governance • Establishment of policy on laws, regulations and core issues affecting directors • Representation & advocacy to government, regulatory bodies and society • Strategic alliances with government and other peak organisations nationally and internationally • Maintain contact with all stakeholder representatives

28. Advocacy • Position IoD as intellectual & opinion leader on: • director issues and corporate governance • Maintain effective relationships with: • government, regulatory bodies & other stakeholders • media • Develop lobbying capacity on core issues • selective alliances, issue - related

29. Education - Initial Courses • Introductory Course • Core Company Directors Course • More Specialist Courses • Fundamentals of Financial Statements • Board Director and CEO Assessment • The Role of the Chairman Provide a continuous learning experience through a director’s life-cycle

30. Professional Development • Annual Conference • Seminars • Director Strategy Dinners • Luncheon Forums • Programmes to encourage special interest groups

31. Information Services • Assist directors to achieve excellence by provision of concise, relevant information: • Library • Website • Journal • Publications • Research & policy: • Position papers • submissions • Code of Corporate Governance • Codes of Conduct & Ethics

32. Marketing • Quality, exclusive image and IoD brand consistency • Impeccable service delivery • pricing to reflect quality product, optimising member value added and IoD revenue • User- friendly service interface • simplify membership processing • Segmented marketing by lifecycle, company size etc.

33. Sound Business Systems • Essential for quality service delivery • built around a Membership Data-Base

34. The New Terrain Geopolitics & Governance Cultures & Societies Economics & Finance Values & Belief Systems Power People Time Potential Planet Technology Civilization & Infrastructure Science Environment & Sustainability Source: GBN

35. Greater Wisdom “ As information doubles, knowledge halves and wisdom quarters” Robert Theobald

36. GOCC Governance - Unique Aspects • Lack of understanding of concept of & rationale for GOCC • Inadequate definition of objectives, particularly social & political • Lack of clarity on roles of those involved • Congress • Department • Government agencies • Board • CEO • Confusion between Advisory & Commercial Boards • Excessive political interference • Board responsibilities not matched with legislative power • Lack of competitive neutrality between GOCC & private sector

37. Typical Revenue Contributions ( Example only - modify to represent financial plan when completed ) Net Revenue

38. World Population Source: UN 1998 World Population Estimates