annual report and accounts 2017 - institute of directors
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Annual Reportand Accounts 2017
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Objects of the Institute of Directors
Our Royal CharterRoyal Charters are reserved for bodies that work in the interests of
the public and represent pre-eminence, stability and permanence in
their field. The IoD was awarded its Royal Charter in 1906 and it remains
an acknowledgement of our mission and responsibility to continue to
promote professionalism in business.
Better Directors1
Promote for the public benefit high levels of skill, knowledge,
professional competence and integrity on the part of
directors, and equivalent office holders however described,
of companies and other organisations.
Better Business2
Promote the study, research and development of the law and
practice of Corporate Governance, and to publish, disseminate
or otherwise make available the useful results of such study
or research.
Better Economy3
Represent the interests of members and of the business
community to government and in the public arena, and to
encourage and foster a climate favourable to entrepreneurial
activity and wealth creation.
Better Services4
Advance the interests of members of the Institute,
and to provide facilities, services and benefits for them.
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Objects of the Institute of Directors 2
Acting Chair of the Board’s Report 4
Director General’s Strategic Review 6
2017 Overview 8
• Membership 8
• Professional Development 10
• Q&A: Paul Bolton CDir of Salford 12
Professional Development
• Policy and Representation 13
• Policy Wins 2017 14
• Brexit – Key Initiatives 2017-2018 15
• Our People and Our Culture 16
• National and Regional Highlights in 2017 18
Our Governance Structure 34
Governance Statement 36
• Governance and Control of the Institute 36
• Council, Board and Committee Members 37
Corporate Governance Policy 42
Statement of Board Responsibilities 43
Financial Review 44
Independent Auditor’s Report 46
The Accounts 48
IoD Chairs from Geographical Areas 68
IoD Premises 70
Annual Report and Accounts 2017 | Contents
“ As Director General, it is my driving ambition to ensure that the IoD provides directors with the tools they need to fulfil their vital role. I have seen the real benefits the IoD provides for members in terms of practical advice, training, networking and lobbying, and have also observed opportunities where we can provide greater value.”
Stephen Martin Director General of the IoD
Contents
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Acting Chair of the Board’s Report | Annual Report and Accounts 2017
2017 has been a year of change and
of consolidation for the IoD.
Early in the year, we welcomed a new
Director General, Stephen Martin and
a new Finance Director, Jim Jordan.
Together, they form a strong team
to lead the Institute through its next
phase of growth. As a consequence,
much of their effort during the year
was to build on existing strengths
and to prepare the organisation for
a reinvigorated future.
Our Royal Charter, which was
granted in 1906, contains four aims.
In my words, these are to promote
the integrity and skills of directors,
promote and develop Corporate
Governance, promote and represent
the interests of business and to
advance the interests of members of
the Institute. The IoD has vigorously
pursued these objectives.
The year has seen strong thought
leadership on issues concerning
governance, business and the
economy. The IoD has influenced
policy and been a leader in debates
on issues such as Brexit, employment
rights, taxation, national infrastructure,
education and skills, start-ups, GDPR,
the gig economy and labour mobility.
A visible manifestation of the Institute’s
emphasis on director training was the
opening of the new IoD Academy on the
3rd Floor of our Pall Mall headquarters
that was the finale to the overall
refurbishment. This, together with the
launch of our online “Digital Academy”,
will allow us to provide a wider and more
sophisticated offering to our members.
During the summer we undertook
a refurbishment of 116 Pall Mall that
included moving the flagship restaurant
to a new location which is lighter and
more welcoming. Commensurately,
the food and beverage were enhanced
and tailored to the demands of
members, which was also the case
with the refurbishment of the Wine
bar and Café Duke.
Likewise, regional events offered
members an improved mix of
development, briefing, debating
and networking opportunities.
The regions and nations continue to
be the rock upon which the IoD is built.
We are only as strong as our members
and we are lucky to have members
who volunteer their time, expertise
and goodwill. I thank them for this.
Both in the UK and internationally, the
IoD’s reputation and brand are strong.
This is predominantly a function of our
members’ attitudes and efforts. Their
ethical standards, aspirations and
skills shape the nature of the Institute.
The past year has not been without its
challenges. The IoD faced a governance
challenge when allegations were made
through our whistleblowing channel
by a number of staff members about
the conduct of a senior colleague.
Our response was in accordance with
our Constitution and met the highest
standards of Corporate Governance.
An independent investigation into
the allegations was commissioned,
and swift and appropriate action
was taken in response to the findings.
Chris WaltonActing Chair of the Board
Acting Chair of the Board’s Report
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Following these events, we enter
the second half of 2018 with a
refreshed Board. Together with the
new management team, this Board is
imbuing the Institute with a renewed
sense of purpose and energy.
I welcome four new independent non-
executive directors: Deborah Davis,
Kirsty Lloyd-Jukes, Alex Simpson and
John Watson. They have a range of
experience and a skills mix that will
serve the IoD well.
To those who have left the Board,
I give thanks for the hard work and
the dedication that they have shown
to the IoD.
Likewise, I thank our members who
participated in conversations with us.
They drew upon their experience and
skills to offer us valuable guidance
and advice.
The professionalism and resilience
of our management and staff is also
very much appreciated. Throughout
the year, they ensured that the IoD
was at the forefront of their efforts.
On behalf of the Board, I say “thank
you”. We feel privileged to work with
such a talented group of people
and are grateful for their hard work,
dedication and resourcefulness.
After a year of substantial change,
the Institute continues its consolidation
and reinvigoration. This work will
continue through 2018. Our Charter is
clear about our goals and the Institute
of Directors understands its mandate.
This gives me confidence in its future.
Annual Report and Accounts 2017 | Acting Chair of the Board’s Report
“ The regions and nations continue to be the rock upon which the IoD is built. We are only as strong as our members and we are lucky to have members who volunteer their time, expertise and goodwill.”
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Director General’s Strategic Review | Annual Report and Accounts 2017
Director General’s Strategic Review
It has been a fascinating first year
as your Director General. I have had
the opportunity to visit our offices
across the UK and to see for myself
the fantastic work being done by
IoD staff and volunteers throughout
the regions and nations. I have seen
the real benefits the IoD provides
for members in terms of practical
advice, training, networking and
lobbying, and have also observed
opportunities where we can provide
greater value. In the coming months,
we plan to engage with members
to share our ideas on how the IoD
adapts to the ever-changing global
environment and hope to hear views
from across the country, so that the
IoD remains increasingly relevant
to future business leaders.
This year has, however, also brought
unexpected challenges. As the
Acting Chair writes in his introduction,
the IoD recently had to respond
to allegations of inappropriate
behaviour within the organisation.
This was a sobering reminder of
the importance of having robust
Corporate Governance arrangements
in place that could withstand issues
arising at the highest levels. I truly
believe that the IoD should be proud
of its response to these allegations.
Any attempt to brush the matter
under the carpet would have
been a disservice to our mission.
Our governance arrangements
ensured an independent and fair
process and we can now move on,
confident that we have practiced
what we have preached, reinforcing
our belief that governance is not
a ‘nice to have’ but is essential for
long-term success.
After a year of observing our
performance, our opportunities and
our challenges, I am drawn to conclude
that, despite being over 100 years old,
the IoD’s Royal Charter goals are still
highly relevant to directors who have
a legal and ethical responsibility for
the strategic direction of companies,
charities and other bodies. As Director
General, it is my driving ambition to
ensure that the IoD provides directors
with the right tools and advice in this
area. I look forward to working with
you to promote better business in
the coming years.
Financial Performance Statement2017 was again a year of continuing
high levels of capital investment in the
IoD through the IoD Training Academy
on the 3rd Floor of our Pall Mall
headquarters. After a surplus before
tax of £67k in 2016, the IoD returned
a deficit of £989k in 2017, caused
in part by the continued decline in
membership. This result was achieved
through sales figures of £26.5m, that
were 2% down on prior year, and an
increase in the overall cost base of 2%.
The deficit was accompanied by
a cash outflow of £2,451k, driven
by investments in the new Academy,
the introduction of a new CRM system
and refurbishment of 116 Pall Mall.
MembershipI have set ambitious growth targets
for the IoD during my tenure as
Director General, and against this
ambition is a challenging backdrop.
The reality is that membership has been
in decline for over a decade, and
this decline continued overall during
2017. However, there is strong cause
for optimism as I am pleased to
report that our newest membership
propositions, the IoD Advance and
IoD 99 categories both reported
growth over the past 12 months.
Stephen MartinDirector General of the IoD
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It is clear from feedback that the
engaged communities within these
groups are a significant contributor
to their appeal. I am keen for these
positive lessons to be learned across
other parts of the business.
In 2018, we will embark upon a
programme of work to first review
and then refresh our entire value
proposition – a root and branch
assessment is needed to ensure we
are delivering what our members
need today and that we are in good
shape to anticipate their future needs.
Extensive consultation with members,
non-members and all stakeholders that
make up our audience will commence
in the second half of 2018.
Corporate Governance and PolicyThe IoD Policy Unit has been
particularly busy over the past year.
The UK’s exit from the European Union
has implications not just for trade,
but for almost every area of domestic
policy that impacts businesses.
In this sense it has rightly become
a focus within all areas of advocacy
for the IoD.
In addition, the policy team have
continued to work on pressing
domestic issues with legislators
and stakeholders across the political
community, highlighting the concerns
and priorities of IoD members and
engaging constructively with Government
on areas ranging from the industrial
strategy to the Taylor Review into
modern employment practices.
Promoting high standards of Corporate
Governance has also remained at the
heart of IoD advocacy over the past
year, with a particular highlight being
the IoD’s successful input into the
Government’s recent proposals for
Corporate Governance reform.
Professional Development2017 was a highly successful year for
Professional Development at the IoD,
as we broke new records with Chartered
Director applications and appointments.
As a Chartered body, the promotion
and growth of our unique Chartered
Director qualification is of crucial
importance. In 2017, we established
a Chartered Director Working Group
to investigate how we can increase
awareness and value of the qualification
in the wider market. I look forward to
sharing their findings and our action
plan in the months ahead.
We also launched the IoD Academy
brand with a state of the art learning
facility at 116 Pall Mall in 2017. We recently
launched the IoD Academy in Northern
Ireland and in the coming months will
launch in other locations across the
UK. In the last few weeks, we have also
launched the digital campus of the IoD
Academy which will ensure all members
have access to a range of high quality
learning at no extra charge and within
their membership package.
BrexitBrexit has remained at the forefront
of business leaders’ priorities over the
past 12 months, and inevitably it has
touched many areas of the IoD’s work.
Over a politically uncertain year, the IoD
website’s Brexit hub, our Navigating
Brexit events, webinars, and factsheets
from the Information Advisory Service
have been invaluable resources for
members. At the same time, policy
reports and IoD member data continue
to be fed into Government and the
media at every stage of the negotiations.
Throughout the year, I have attended
regular meetings with senior figures
across Government and the wider
political community to represent the
priorities and concerns of IoD members
through the negotiations. As we move
into phase 2 of the talks, I will continue
this high-level engagement alongside
members of the IoD Policy Unit.
Regions and NationsThe last year has seen the IoD
continuing to bolster the resources
available to our regional and national
branches. Notable changes and
recent investments have included
the introduction of professionally
run Community Engagement days in
London and Manchester, the expansion
of the Regional marketing team to
better support our staff and volunteer
teams, and the introduction of a
facilitated, discounted access to
the IoD Certificate and Diploma.
This work will continue into 2018
as we focus on how to better bring
regional and national branches
together to share best practice.
We will also continue working with
our community to support them
with new technology, resources
and guidance. In addition, we are
reshaping our Committee proposition
into an exciting Ambassadorial
programme fit for the future. These
changes will allow us to better hear,
understand and support our members
with the specific business challenges
and opportunities that exist in their
regions, nations and branches.
I remain committed to the goal that
wherever our members are based,
they will have access to the very best
support, guidance, training & events
that the IoD has to offer.
Annual Report and Accounts 2017 | Director General’s Strategic Review
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2017 Overview | Annual Report and Accounts 2017
At the end of 2017, IoD membership
numbers were 32,034. This is a net
decline of 2,012 since the end of 2016.
8,065 new members were acquired in
2017 and the retention rate was 68.8%.
Due to changes in reporting mid-
year, neither measure is comparable
with 2016. We now have a consistent
measure of reporting that provides
clarity across all membership types
and a baseline for future measurement.
There has been a small redress
in the gender split of IoD membership.
Women now make up 18.7% of
membership compared to 16.5%
a year earlier, with a total increase
of 716 members.
Membership
We have also seen a trend towards
a younger membership demographic,
as we have introduced new activities
to appeal to a wider audience than
in the past. At the end of 2017,
the number of members under the
age of 50 had grown by 8%, despite
overall membership having decreased.
We will continue working to broaden
the appeal of the IoD to a more diverse
audience, making the community
relevant to and representative of
the entire business community.
Membership numbers for 2017
At the end of 2017 IoD membership numbers were 32,034. This is a net decline of 2,012 since the end of 2016.
2017
2016
Numbers Down
5.9%
Membership Statistics for 2017
Core Advance 99 Student
2016 30,762 274 1,240 1,770
2017 27,217 903 2,320 1,594
11.5%year on year
230%year on year
87%year on year
10%year on year
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Annual Report and Accounts 2017 | 2017 Overview
Geographical breakdown of membershipMembership numbers have declined
consistently over many years, but
there have been some useful learnings
and pilot projects that are assisting us
in our future planning.
Whilst overall decline was seen in 2017,
we saw growth in our Advance and 99
membership. The feedback we received
indicates that the greatest appeal of
these groups relates to the sense of
community and support of like-minded
members. This corroborates previous
research we carried out around
the primary reasons that members
join the IoD, which is being able to
connect and learn.
With ambitious growth plans over the
next several years, we are embarking
upon a number of projects designed
to renew and refresh the membership
proposition, ensuring its relevance
to a changing and more diverse
business audience.
Extensive research and consultation
will be carried out, as we work
with members and the wider
business community to deliver a
value proposition designed to help
businesses and individuals grow.
Geographical spread of membership
4.00%
Channel Islands (UK)
4.57%
East Midlands
10.70%
East of England
18.20%
London
2.90%
North East
24.36%
South
5.52%
Scotland
2.90%
Northern Ireland
5.52%
North West
6.63%
South West
1.77%
Wales
5.13%
Overseas – Outside Europe
1.41%
Overseas – Europe
3.23%
Yorkshire
4.80%
West Midlands
0% 30%
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2017 Overview | Annual Report and Accounts 2017
Professional Development
2017 was another busy, exciting
and successful year for professional
development at the IoD. It was also
another record year for the IoD’s
Chartered Director qualification;
with more applications and
appointments in the past two years
than the previous four years combined.
Despite the positive growth in the ranks
of Chartered Directors, we believe the
number should be significantly higher
and that Chartered Directors should be
on the boards of all organisations across
the UK and beyond. Consequently,
we established a Chartered Director
Working Group in March 2017 which
was made up of Chartered Directors,
head hunters and IoD staff. The group
focused on two specific topics:
how to drive greater engagement
with, and value for, our existing
community of Chartered Directors
and how to increase awareness
of, and appetite for, the Chartered
Director qualification. The findings of
the group was presented to the IoD’s
Executive Committee in Spring 2018.
In 2016, we took the decision to seek
external assessment and mapping of
our own qualifications to nationally
recognised standards. The credit rating
enables candidates and employers
to quickly and easily understand the
academic level of their qualification,
as these are mapped to the Scottish
Credit and Qualifications Framework
(SCQF). The rating also means
that IoD qualifications now have an
internationally recognised number
of credits which are transferable
to other courses and qualifications.
In 2017, we successfully completed our
first audit and therefore retained SCQF
level 9 for our Certificate in Company
Direction and SCQF level 11 for our
Diploma qualification. This places the
Certificate at a level equivalent to a
Bachelor’s degree and the Diploma at
a level equivalent to a Master’s degree.
The IoD Academy launched in
September 2017 with the opening
of our first state of the art learning
environment on the Third Floor of 116
Pall Mall. The intention is that this will
become the blueprint for IoD director
development across the UK and beyond.
In 2018, we have launched in Northern
Ireland and we aim to do the same in
Wales, Scotland and across England.
The digital campus of the Academy
launched in Spring 2018, extending
our provision of, and access to, a range
of high quality director development
and peer learning. Access to the digital
campus will be provided to all IoD
members at no extra charge, within
their annual subscription. This will
support the fulfilment of our Charter
objectives by providing a spectrum
of development offerings to cater
for a range of budgets. The digital
campus is accessible across the UK
and internationally.
Significant progress was made
in 2017 towards the completion of
our four planned syllabus reviews.
The complete redevelopment and
update of our flagship Certificate in
Company Direction will be completed
in 2018. This change is in response to
the revised Corporate Governance
Code which is due to be published
in September 2018. Our plan is to
be first to market with our refreshed
Corporate Governance module,
based on the revised Code.
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Annual Report and Accounts 2017 | 2017 Overview
432development programmesdelivered to 6,256
delegates from 41 countries
90%satisfaction
scoreimproving on our 2016
score of 89% and up for a second year in a row
91%of delegates
would recommendIoD Professional
Development to a colleague, compared
with 90% in 2016
2017 highlights
32%of delegates were women
58%of delegates
were IoD members
128Chartered Directors
appointedbringing the total to 1480, of which 1154 have active
IoD membership
77%of which were UK
based
96%pass rate of Chartered Director interviews
9% more Chartered Directors
appointedin 2017 than 2016 which was
a record breaking year
All figures correct as of May 2018
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Q&A: Paul Bolton CDir of Salford Professional Development
Paul Bolton is the Managing Director of ONECPD, part of Salford Professional
Development within the University of Salford. He joined the IoD in 2015 and became
a Chartered Director in 2017.
Why I undertook the Chartered Director programme
I was attracted by how the courses were structured - as they could
be completed while continuing my full-time commitment to ONECPD
– and how they built a core foundation of knowledge and skills which
I have subsequently applied to real-life situations. Making the final step
to become a Chartered Director was a natural progression, essentially
requiring me to build a portfolio of my experiences as a director and
discuss these with an IoD interview panel.
Paul BoltonManaging Director of ONECPD
How the Chartered Director programme has helped me
The programme has been a great help and I routinely apply the knowledge,
skills and insights I have gained from it. It has proved to be invaluable
in equipping me with the strategic planning skills that will enable me to
deliver further sustainable growth in our business. I was able to network
with other strong leaders, and that has helped me, because I have been
able to use some of them as a sounding board and others as a knowledge
bank. It has also led to some great friendships.
I found the Role of the Director and the Board a particularly interesting
module of the Certificate programme, as it really articulated the responsibilities
of directors, especially from a legal point of view. I doubt most directors
are actually aware of what they are liable for, and I believe there should be
some sort of mandatory training for directors such as this when they join
a board. The IoD is an important institution striving to raise standards and
diversity in boardrooms across the country, which is good for us all.
“ The programme has been a great help and I routinely apply the knowledge, skills and insights I have gained from it. It has proved invaluable in equipping me with the strategic planning skills that will enable me to deliver further sustainable growth in our business. I was able to network with other strong leaders, and that has helped me, because I have been able to use some of them as a sounding board and others as a knowledge bank. It has also led to some great friendships.”
The importance of the CDir qualification
It is a kite mark, recognising and giving credence to directors who are
passionate about ensuring the highest business standards in terms of
knowledge, skills and, arguably most importantly, values and beliefs.
The IoD is an important institution striving to raise standards and diversity
in boardrooms across the country. This will ensure businesses in the UK
are able to compete on a global scale, which is good for us all.
2017 Overview | Annual Report and Accounts 2017
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Annual Report and Accounts 2017 | 2017 Overview
Policy and Representation
2017 was another tumultuous year
for UK politics, with the IoD’s Policy
Unit responding to the surprise
General Election by producing a
series of eight short manifesto papers
on areas including tax, infrastructure
and flexible employment, which
gained considerable attention for
the Institute and its members.
Throughout the year, the IoD continued
to push the Government for a smooth
Brexit process, playing a pivotal role
in encouraging Ministers to prioritise a
transition period, which was agreed in
principle in December 2017. Alongside
Brexit, the IoD continued to conduct
surveys and publish work on a wide
array of issues relevant to members,
including a high-profile campaign
on improving mental health at work.
26policy reports
(Big Picture articles, Navigating Brexit,
Fourth Industrial Revolution, Cyber Security,
Mental Health in the Workplace, Older
Entrepreneur, GGI, Life Sciences,
The Business End of Brexit,
General Election ‘minifestos’)
12surveys created
11 monthly surveys, 1 snap post-General
Election survey.
Average response rate: > 1 in 4.
Panel size: 3,193
132policy events
109press releases
5,342twitter followers
@IoD_Press
678national print hits
Including 74 front page news stories 2,004
TV and radio appearances
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2017 Overview | Annual Report and Accounts 2017
Policy Wins 2017
Every month we seek IoD members’
views on key policy issues affecting
their organisations through our
Policy Voice panel. Here are just
some of the many ways we influenced
government policy and successfully
lobbied for changes to the law on the
back of Policy Voice surveys of our
members in 2017.
BrexitSecuring a transition period before
Brexit went to the top of the Government
agenda after sustained pressure from
the IoD, informed by Policy Voice
members. A transition period was
agreed with the EU in principle in
December with the precise details
set out in March 2018.
EmploymentThe rights of EU citizens to remain
in the UK after Brexit came top of
Policy Voice member priorities.
Most of those rights were guaranteed
by the Government in December
2017 following consistent and vocal
lobbying by the IoD.
TaxationThe Autumn Budget 2017 provided
more help for SMEs with business
rates after the IoD raised the concerns
of Policy Voice members directly with
the Chancellor.
InfrastructureOfcom reformed the communications
market after consistent lobbying from
the IoD on the need for more and
faster fibre optic broadband provision,
informed by Policy Voice surveys.
Education and skillsSkills shortages have consistently
been one of the top concerns raised
by IoD members in Policy Voice.
Retraining was placed at the centre
of the Government’s Industrial
Strategy after the IoD spearheaded
a campaign to boost lifelong learning.
Start-upsThe IoD successfully pushed the
Government to retain SEIS/EIS tax
reliefs for start-up businesses in the
Autumn Budget 2017 after plans they
would be scrapped were announced.
The IoD has been appointed as the
UK representative to the G20 on
behalf of entrepreneurs.
GDPRPolicy Voice members expressed
concern about GDPR compliance
and a new helpline was launched by
government to help SMEs understand
the new rules.
Gig EconomyThe IoD members called for greater
clarity in employment law and it became
a cornerstone recommendation in the
Government’s Taylor Review.
Labour MobilityThe IoD helped force a Government
U-turn on plans for a proposed £1,000
per EU worker immigration tax on
employers after Policy Voice members
raised concerns about access to
migrant labour.
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Annual Report and Accounts 2017 | 2017 Overview
“ Enacting Brexit presents a huge task for all sides. In this regard, it is no wonder that our upcoming withdrawal from the EU consistently ranks among the top concerns of IoD members.
The IoD sees its role as providing advice to business and policymakers on the difficulties that arise as we exit the EU, as well as the opportunities that might be on the longer term horizon.
We are committed to helping our members navigate the Brexit minefield and this is demonstrated by our programme of varied activities, including the Navigating Brexit event series, our webinar surgeries and numerous policy reports.
Looking ahead, we anticipate another busy year as the clock ticks down to Brexit day and we look forward to launching new projects.”
Brexit – Key Initiatives 2017-2018
Ahead of the UK’s withdrawal from the European Union, the IoD’s Policy Unit is
actively engaging with members, politicians and stakeholders on the issues that
look set to impact the business community.
The IoD’s main Brexit activities span advocacy, events and research publications.
We are committed to working with policymakers with a view that our combined
efforts can result in the best deal for business in Britain.
Bridging the Brexit Gap
A paper which explains the importance of a transition period for businesses
as the UK prepares to exit the EU. In particular, the paper puts forward
four models as options for bridging arrangements.
Key initiatives for 2017-2018 include:
Alexandra RenisonHead of Europe and Trade Policy
The business end of Brexit
A paper which considers how IoD members are approaching preparing
for our impending withdrawal from the EU, including a detailed look
contingency planning activities.
Customising Brexit
A paper setting out a proposal for post-Brexit trading arrangements.
In the report, we argue that a hybrid arrangement of a partial customs
union covering industrial goods and some limited processed agricultural
goods, as well as a free trade agreement tying off other areas, would
allow the UK to operate an independent trade policy while also protecting
some of the UK’s key industries.
The business of going global
A paper which uses statistics about IoD membership to identify the potential
opportunities that await UK businesses as we leave the EU.
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2017 Overview | Annual Report and Accounts 2017
Our People and Our Culture
Our people are at the heart of what we
do. It is their passion, creativity, hard
work and dedication that enables the
IoD to continue to grow and advance.
We are very proud of the expertise
we have in-house, and the exceptional
service we are therefore able to
deliver to our members and guests.
During 2017, we continued to
invest in our people and develop
our organisational culture. We are
committed to ensuring that we drive
towards high performance, and invest
in our people to equip them with the
knowledge, skills and mind-set to
operate at the highest level.
Strong leadership is at the heart of
high performance. During 2017, we
continued the development of our
leadership and management capability
by delivering coaching and follow
up workshops for our leadership
development programme as well as
several management skills workshops.
We have continued our work on the
mental wellbeing of our people by
raising the profile of this important topic
both internally and externally. During
Mental Health week, we provided our
employees with a number of interactive
sessions to help them look after
their mental and physical well-being
and delivered mental health first aid
training to staff.
The number of employees (full time equivalent) was 2031
During 2017, we implemented and
embedded a new matrix organisation.
This new structure is grounded in
our fundamental charter objectives:
Policy, Membership and Professional
Development. This new structure,
together with bringing all of our London
employees together in our 116 Pall Mall
office space, has provided opportunities
for staff development and promotion
and has enhanced collaboration. In 2018,
we are planning to develop our working
space and approach further to optimise
how we work and engage.
We have continued to engage with
staff following an all-staff survey
to gather insight from across the
organisation. Engagement will remain
a key focus for 2018 as we further
develop and embed the initiatives
started in 2017. This includes staff
social events, regional engagement
events with our volunteers and the new
staff Reward and Recognition scheme.
Together with the “Wall of Wow”, this
will provide an opportunity to formally
and informally recognise individuals
going above and beyond and living
the IoD’s values.
NOTE
1. As at March 2018
which includes..
Gender composition of our employees, across our organisation1:
113Female
employees(56%)
90Male
employees(44%)
Female: | Male:
1
4
9
9
3
5
20%
80%
ExCo
50%
50%
Head of
Department
37%
63%
Regional Directors
17www.iod.com
Annual Report and Accounts 2017 | 2017 Overview
The next 12 monthsIn 2018, the IoD will continue
working collaboratively to build better
businesses for Britain and beyond.
In the challenging year ahead, there has
never been a better time to broaden
our horizons, knowledge and network
and we recognise the importance of
our people in delivering this, and we
will continue to invest and support
our people to deliver our objectives.
%
Ethnic origin1
White British | 61%White Other | 12%Black African | 5%Indian | 4%White Irish | 4%Asian Other | 3%Black Caribbean | 3%
%
Length of service1
0-2 years (94) | 46%
5-10 years (20) | 10%
15-20 years (12) | 6%
2-5 years (47) | 23%
20+ years (6) | 3%
10-15 years (24) | 12%
NOTE
1. As at March 2018
“ During 2017 we continued to invest in our people and develop our organisational culture. We are committed to ensuring that we drive towards high performance, and invest in our people to equip them with the knowledge, skills and mind-set to operate at the highest level.”
Unstated | 3%Chinese | 2%Mixed Other | 1%
White Caribbean | 1%White Asian | 1%
18 www.iod.com
2017 Overview | Annual Report and Accounts 2017
National and Regional Highlights in 2017
We continue to work closely with our
community of members across the UK
and internationally to drive member
engagement and insights, that will
not only help inform our membership
proposition review in 2018, but will
also allow us to finesse our efforts to
effectively support Members in their
business challenges, across a diverse
membership base of established and
start-up SME’s.
In 2017 we held two large-scale North
& South UK Engagement Events for
our ambassadorial committees and
Chairs, to ensure we not only continue
to leverage their experience, expertise
and innovation, but can also continue
to use the IoD as a positive vehicle for
the sharing of best practice and peer
to peer learning.
We continue to focus on driving
inclusivity and in 2018, we will be
undertaking a complete review of
our events strategy to ensure that
we have a consistent and coordinated
approach across all of our Regions,
Nations and Branches.
We look forward to continuing to
work closely with our communities
to help shape a positive future for all
IoD members and to support them
as they face into the challenges and
opportunities presented by Brexit
and GDPR across all business sectors
and industries.
Our 2017 highlights demonstrate the
diversity and strength of our regions
and nations and their support for local
businesses and members.
IoD West Midlands social at Warwick Castle
“ In the last year we have also expanded our successful £10 Student challenge from Nottingham Trent University, where the Student Membership offering started in 2014, to a number of new institutions, and in the process have now achieved over £50,000 raised for charities through this initiative, an achievement of which the team can be extremely proud.”
Alan Fitzwater Director of Regional Engagement
19www.iod.com
Annual Report and Accounts 2017 | 2017 Overview
Scottish International WeekIn October, we held a phenomenally
successful Scottish International Week
at Charlotte Square. The IoD Scotland
hub was packed with attendees either
taking their first steps into the global
market, or those who were already
operating internationally and were
keen to increase their existing activities.
The event highlighted that there are
many businesses wanting to take their
business beyond our shores, but were
unsure how to do so.
Over the course of the week, speakers
and guests discussed ways in which
we can improve and change the
mind-set of businesses to enter into
new markets from the start or to
consider doing so, even if they are
well established. From start-ups to
big corporates, the future is global so
it is important that we directors think
globally from day one – right up to the
point of a stock market listing or sale.
Speakers included R. Michael Anderson,
US entrepreneur on The 3-Step Method
I Developed because I got Tired of
Failing Internationally, Rachel Paling,
Director of Efficient Language Coaching
from Germany on Neurolanguage ---
Communication and language strategy
for global business, Fiona Donnelly,
Director at Red Links Hong Kong on
Cracking the Hong Kong Market and
Dr. Astri Jæger Sweetman Kvassnes,
CEO, RockDoctor, Author and Mentor
– Norway as a business opportunity –
fighting trolls or earning kingdoms?
Having access to a network of peers
who can offer advice on what they
have learned in business is vital and
a large part of what the IoD is here
to deliver to its members.
David WattIoD Scotland Director
Russell DalgleishScottish Business Network
Scotland
20 www.iod.com
IoD Scotland Annual Conference at GleneaglesThe IoD Scotland team were delighted
to host a number of members and
non-members from a range of
sectors across Scotland at the Annual
Conference held on 2-3 November.
This year’s conference focused on
“Preparing for the Future: Creativity,
Adaptability & Innovation”. As Scotland
responds to a changing geopolitical
and economic climate,we explored
how organisations build a change and
adaptability culture. The conference
brought together first class speakers
including Professor Dame Anne
Glover, biologist and academic;
Philip Long, Director of the V&A
Museum Dundee; Ian Callum, Director
of Design at Jaguar; Shona McCarthy,
CEO, Edinburgh Festival Fringe Society;
and Mike Adams, CEO, Purple.
The Conference also facilitated
workshop presenters and encouraged
fellow delegates to learn, discuss and
debate today’s business issues.
Networking at the Annual Conference
Conference plenary networking session
2017 Overview | Annual Report and Accounts 2017
21www.iod.com
Annual Report and Accounts 2017 | 2017 Overview
IoD invited to key discussions with Prime Minister in SwanseaAfter signing off the Swansea Bay City
Deal at the Liberty Stadium in March,
Prime Minister Theresa May visited
Swansea University’s Bay Campus,
where Director of IoD Wales Robert
Lloyd Griffiths was among invited
industry and business leaders.
The group discussed the Government’s
Plan for Britain and how Swansea’s
ground-breaking £1.3bn City Deal
will help create a new era of growth
and renewed prosperity and ensure
innovation is revived.
“ It was an honour to be part of such positive and open discussions and as a long-standing supporter of and campaigner for a Swansea Bay City Deal, it was very pleasing to see the strategy being progressed and signed.”
Robert Lloyd Griffiths Director of IoD Wales
Wales first Minister attends opening of new IoD Wales baseWales First Minister Carwyn Jones
joined IoD Director General Stephen
Martin and Director of IoD Wales
Robert Lloyd Griffiths to open the
new Wales office at Cardiff Business
School. Our new IoD Wales office and
hub offers a host of new benefits and
opportunities both to its members,
and to the faculty and staff of the
School, which is ranked sixth of 101 UK
business schools for the quality of its
research and joint first for environment.
Prime Minister Theresa May and Director of IoD Wales, Robert Lloyd Griffiths
Stephen Martin with Wales First Minister Carwyn Jones and Robert Lloyd Griffiths
Wales
“ It’s a pleasure to be here, to see the links being strengthened between business and academia. We know that we don’t lack entrepreneurial spirit and flare in Wales but what was missing for so many years was the structure to support that. Universities train and produce those people who go on to employ others and support start-up businesses that may start small, but can also grow. It makes perfect sense for the IoD to be based here and for businesses, whatever their size, it is hugely important to be able to learn from the expertise and research taking place here. This is the beginning of what I believe will be a very beneficial example of mutual co-operation. It is hugely important that we see models like this develop across Wales.”
Carwyn Jones Wales First Minister
22 www.iod.com
Large Company Director of the year winner Janet McCollum and IoD NI Chairman Ian Sheppard
Family Business Director of the year, Gareth Loye
Appointment of new NI DirectorIoD Northern Ireland saw change in
2017 with the appointment of Kirsty
McManus as Director following the
retirement of Linda Brown, who spent
23 years at the organisation. Kirsty
was formerly the Head of Business
Development at the Northern Ireland
Chamber of Commerce and previously
held senior positions at the University
of Ulster, the CBI and Vistage.
Bill Molloy (Bombardier), Suzanne Wylie (Belfast City Council), Kirsty McManus (IoD) and Mark Carruthers (BBC) at IoD Northern Ireland Annual Lunch 2017
Huge success for Northern Ireland at the UK Finals of the IoD Director of the Year AwardsJanet McCollum, Chief Executive of
Moy Park was named Large Company
Director of the Year while Gareth Loye,
Director of M&M Contractors and
Mascott Construction won the Family
Business Director of the Year category.
Janet was also highly commended
in the overall Director of the Year
category in the prestigious UK finals
held in London.
Northern Ireland
2017 Overview | Annual Report and Accounts 2017
23www.iod.com
Annual Report and Accounts 2017 | 2017 Overview
Gerald Ratner and guests at IoD Essex Chair’s Christmas Breakfast
Hosting over 50 events across the year
the IoD in the East of England continued
to educate, inform and update both
members and non-members across
the ‘Enterprising East’. The 5 branches
within the region are now led by a
strong team of IoD Ambassadors
who represent the IoD across a
variety of business sectors for
which we are extremely grateful.
Our Event and Branch Officers
continue to manage excellent events
and answer member enquiries quickly
and professionally. Three branches
welcomed new Chairs in 2017 – Christine
Bhatt as Chair of IoD Essex, Rahul
Garella as Chair of IoD Hertfordshire
and Carolyn Rand as Chair of IoD
Cambridgeshire.
Together with Graham Kill, Chair of IoD
Suffolk, Howard Ingleson, Chair of IoD
Norfolk and David Sales, our Regional
Chair, the East of England chairs and
IoD team work together to promote
good governance and best business
practice across a diverse range of
industry sectors in the region.
2017 included the first IoD Enterprising
Women in the East Summit attended
by 100+ directors and featuring
presentations regarding gender pay
gap, self-branding and creating an
inclusive business culture.
IoD Essex also welcomed Gerald Ratner
to their Chair’s Christmas Breakfast.
East of England
Chief Superintendent Rachel Nolan, Essex Police presents at IoD Enterprising Women in the East Summit
24 www.iod.com
IoD Members and guests experienced
a very moving and fact-filled afternoon
when they visited the new International
Bomber Command Centre (IBCC)
in Lincoln.
Lincoln College Group and its Chief
Executive Officer and IoD Lincolnshire
Chairman, Gary Headland, hosted the
event, which included a tour of the
site and stunning memorial at the
IBCC, which sits towering above the
city Lincoln. This world class facility
is designed to serve as a point for
the recognition, remembrance and
reconciliation for Bomber Command.
The Spire commands stunning views
across Lincoln, with a focus on the
City’s ancient Cathedral, which served
as a sighting point for crews flying
from Lincolnshire. For many of the men
named on the accompanying walls,
the Cathedral provided their last sight
of Britain. It is now recognised as the
UK’s tallest war memorial. The Spire,
inspired by the wing span of the Avro
Lancaster Bomber, was awarded the
2016 Structural Steel Design Award.
It is surrounded by memorial walls.
Following the site visit, guests
enjoyed afternoon tea and heard Air
Vice-Marshal Warren James speak
about the RAF, it’s expertise and
challenges at what is Britain’s first Air
and Defence Career College housed
within the Lincoln College campus.
The Air and Defence Career College
officially opened in September 2016
and provides employer-led, career
focused education and technical
training for 16-19 year-olds. This unique
and innovative model is designed to
create secure career paths in the RAF,
aerospace and catering industries.
Air Vice-Marshal Warren James
IoD East Midlands visit to International Bomber Command Centre, Lincoln
International Bomber Command Centre (IBCC) Memorial, Lincoln
2017 Overview | Annual Report and Accounts 2017
East Midlands
25www.iod.com
Annual Report and Accounts 2017 | 2017 Overview
EventsWe refocused our events, solely onto
member engagement to make them
inspirational, educational or fun.
We design our events along broad
themes to appeal to more members,
recognising they can have different
needs and interests and strive to make
our events calendar flexible in terms of
timings, and diverse in terms of topic.
We also work hard to demonstrate
diversity, and reflect leadership role
models for minority groups. This has
seen our percentage of women in
membership grow in 2017.
Highlights include:
• The launch of a monthly event
series in Liverpool, at Tilney in the
Liver Building, which is driving new
interest in Liverpool City Region.
This was most recently led by
Olympian Beth Tweddle and IoD
Award winner Chris Brindley, who
talked about Leadership Transitions
– Beth transitioned from athlete
to business leader and Chris from
Exec to Non-Exec.
• Our annual cruise on Windermere
and our Women’s Conference
both saw the highest attendance
numbers to date.
• The introduction of Ten Talks –
a regular roundtable event to
encourage a small member-only
group to discuss ‘what’s keeping
them up at night’, and benefit from
the experience of their peers.
• A new ‘Policy Flash Mob’ roundtable,
where a small number of members
can be brought together at short
notice to influence a particular
Policy theme.
North West Women’s Conference
January 2018 marked the first
anniversary of the North West team,
which now comprises Claire Ebrey
(Regional Director), Lauren Mullan
(Events Manager) and Sumaiya
Rudhmila (Communications Officer).
The year also saw new Chairs in
Liverpool (David Holdsworth),
Lancashire (Stuart Thompson) and
latterly a new Regional Chair (Mike
Blackburn), all of whom are already
adding considerable value.
North West
We make the IoD in the North West
work in its own right by focusing on
Leadership as the key golden-thread
that unites all of our members. The IoD
is in a unique position to bring together
a strong community of North West
leaders, who have access to quality
professional development, are well
connected across sectors and who can
influence policy that affects our region.
“ We design our events along broad themes to appeal to more members, recognising that they have different needs and interests.”
Claire Ebury Regional Director, IoD North West
26 www.iod.com
CommunicationsWe have made a huge leap forward
this year in terms of modernising
our communications to find new
and interesting ways to engage with
our members on top of traditional
channels. We try to bring the member
voice through our communications,
using quotes, case studies and videos,
and to build a feeling of community
both on and offline.
MembershipMembership in the North West
increased month on month in the
second half of 2017, which gives us
confidence that we are successfully
engaging with our existing members,
and potential members.
InfluenceIoD North West is positive about
devolution, and provided members
with the opportunity to engage with
the Manchester Mayor Andy Burnham
on his Employers Charter. In Liverpool,
we have represented our members
views on the issue of diversity to
Mayor Steve Rotheram, encouraging
him to reconsider his all-male cabinet.
AdvanceIoD Advance successfully launched
in April 2017 with 107 members
by February 2018. Emily Martin is
Advance lead for the North, and we
work closely with her to maximise the
impact of Advance in the North West.
Andy Burnham speaking to IoD North West members
2017 Overview | Annual Report and Accounts 2017
Carlos Oliveira, Young Director of the Year Jane Montague, North West Family Business Director of the Year
27www.iod.com
Annual Report and Accounts 2017 | 2017 Overview
BerkshireThe Berkshire branch hold regular
Women’s Lunches and in June 2017
our guest speaker was Talita Ferreira,
Chartered Director. The quarterly
Cliveden Breakfast Clubs are always
well attended with great topics and
no speaker as the content comes
from the attendees!
The sun was out for the sailing regatta
with some strong winds creating some
competitive racing.
The Christmas lunch raised £1,620
for RNLI which was close to the heart
of our guest speaker, Lesley Foden,
who had rowed around Great Britain.
IoD South sailing on the Solent
The south region have run a series
of successful branch and regional
events throughout 2017 ranging
from informal networking sessions
to events in the new IoD Academy.
Highlights include Sailing on the
Solent, an IoD 99 visit to McLaren in
Surrey and a sponsored event with
BMW where members learned about
the future of sustainable motoring.
South
IoD Berkshire Women’s lunch
28 www.iod.com
Hampshire & Isle of WightIn July, the branch launched IoD
Connect networking events, which has
so far held a total of 4 early evening
meetings at venues in Winchester and
Southampton. This has attracted new
members as well as members who had
not previously engaged with the local
branch. These events will continue on
a quarterly basis throughout 2018.
In September, the branch organised
a car driving experience day at the
Balmer Lawn Hotel in the New Forest.
40 members and guests were given
the opportunity to test-drive 10
premium cars including Porsches,
Maseratis and Range Rovers around
the idyllic local countryside.
On 2nd November, the branch welcomed
the IoD’s Director General Stephen
Martin as guest speaker at a dinner
to explore the future prospects of
the economy in the context of Brexit.
We also heard from Nick Burns,
the former Chairman of Capita
Employment Services, who talked
about his entrepreneurial journey.
IoD Hampshire breakfast meeting
2017 Overview | Annual Report and Accounts 2017
Buckinghamshire & Milton KeynesIn Buckinghamshire as elsewhere,
2017 was without doubt a year of
turbulent and uncertain times especially
with respect to World and European
affairs. Along with our regular business,
We hope the IoD was able to bring
some stability and continuity to things.
We continued to engage with members
and other business groups as usual,
with a number of topical events
ranging from GDPR to a briefing from
the Bank of England about the state
of the economy.
In our own Buckinghamshire and
Milton Keynes area, we can see that
the Young Directors and IoD 99
groups are by far the fastest growing
areas of membership within the IoD,
which gives us great confidence for
the future.
29www.iod.com
Annual Report and Accounts 2017 | 2017 Overview
OxfordshireDespite the uncertainties in the
market during 2017, the business
community in Oxfordshire still seems
to be thriving, which is a tribute to
their resilience and adaptability.
There has been a great deal of
infrastructure investment coming
into the county, which we hope that
businesses will take advantage of
and the opportunities that come
with such investment. We continue
to encourage our members to make
the business voice heard with the
councils, LEP and through the IoD’s
Policy Voice.
Like the rest of the country, there are
continuing difficulties with regard to
funding essential services. One area
where our local members are doing
a great deal to help is with education
through volunteering as governors,
mentors, career connectors, or giving
their time to organisations such as
Young Enterprise. With the difficulty
in recruiting young people with the
right skills a continuing issue for
companies, our members are doing
a great deal to encourage young
people and open their eyes to the
opportunities available to them.
We have enjoyed some excellent events
this year, with some great speakers
and high quality meetings, where we
have all had the opportunity to learn
and develop our understanding of
relevant issues.
KentStephen Martin visited the Kent Branch,
where we toured the Faversham
Brewery, which is home to Shepherd
Neame, Britain’s oldest brewer.
Nestled in the medieval market town
of Faversham in Kent, brewing has
continued on this site for centuries.
Stephen also hosted a lunch for
IoD members at the Brewery, which
was then followed by a visit to MEP,
a manufacturing business based
in Aylesford, Kent. Stephen Martin and Jonathan Neame, CEO at Shepherd Neame
IoD Kent Business Summit
30 www.iod.com
SurreyThe Surrey branch has had another
great year, the ambassador structure
(which originated in Surrey) has
ensured a diverse and interesting
calendar of events all of which have
focused on an element of engagement
and director learning. Amongst the
highlights, there was an excellent
mental health event in conjunction
with Surrey County Council and a
Cybersecurity event with the Surrey
Centre for Cyber Security.
We held an HR and people event
in conjunction with the CIPD, and
a Business Scale-Up event with the
Business School at the University
of Surrey. We also hosted another
successful Economists Debate.
Members were privileged to enjoy
a factory tour at McLaren Automotive
in association with Driving for Better
Business.
Driving for Better Business presentation
IoD Surrey members visit McLaren Automotive Factory
SussexIoD Sussex had an active year in
2017, with positive engagement and
feedback from members. A number
of events were held, including regular
Bank of England briefings, breakfast
and lunch sessions on topics such
as Growth through Acquisition and
informal IoD Connect networking
sessions. IoD Sussex members were
also invited to a presentation from
Rampion on its major wind farm
installation off the south coast.
2017 Overview | Annual Report and Accounts 2017
31www.iod.com
Annual Report and Accounts 2017 | 2017 Overview
IoD Bristol networking event for IoD 99 members
Alex Mitchell, Chairman of IoD 99 presenting to current and prospective members
Tour of RNAS Yeovilton
At IoD South West, we are dedicated
to supporting over 2,000 Directors
from a diverse range of businesses
spread across 9,200 square miles from
Cornwall, across to Dorset and up to
Gloucestershire. The South West is the
proud home for global industry leaders
in aerospace, advanced engineering,
digital technology, financial services,
creative media and renewable energy
as well as land-based sectors such as
tourism and food production.
Each year, IoD South West delivers
an exciting event programme which
celebrates the diversity of our region and
encourages local business engagement,
networking and knowledge-sharing.
IoD South West has always had close
links with the military services based
in the region and over recent years
has visited various Army, Navy and
Air Force operations. In March 2017,
IoD Somerset Committee Member
John Beake of the Wessex Reserve
Forces’ & Cadets’ Association
facilitated a fascinating behind
the scenes tour and leadership
presentations at RNAS Yeovilton,
the UK’s largest Naval Air Station.
In May 2017, Director General Stephen
Martin visited the region for the first
time and met with key IoD partners
from South West LEPs, Universities
and other Business Organisations.
In addition, Stephen met and heard
from various IoD members from leading
local businesses before speaking
at the IoD South West 2017 Annual
Dinner and Awards.
IoD Bristol has one of the highest
proportions of both younger and
female members among UK Branches.
An IoD 99 event hosted by NatWest
ESpark in the summer. Some 40
current and prospective IoD 99
members met and enjoyed networking
and a micro-pitching session.
South West
32 www.iod.com
2017 was an exciting year for IoD
West Midlands. We welcomed BHSF
and Qatar Airways as our inaugural
Patrons, doubled our Peer to Peer
mentoring programme to eight
groups across the region and added
Coventry University to our student
mentoring programme.
We launched IoD 99 membership and
events and doubled the original target
for the year, with over 110 new 99’ers
joining in our region.
We hosted a number of inspiring
speakers from GCHQ, the Army and
Birmingham Airport Fire & Rescue.
We were delighted to have the newly
appointed West Midlands Mayor,
Andy Street, as key speaker at our
Annual Dinner in Warwick Castle and
to co-host a lunch with Sir John Peace,
Chair of the Midlands Engine, with our
colleagues in the East.
We were also invited to tour the House
of Commons with Gavin Williamson,
then Chief Whip.
The year was topped off when our
West Midlands Chair, Dr Jason Wouhra,
was awarded an OBE for services to
business and trade and Worcester
based Nathan Warren received the
award for New Chartered Director
of the Year, achieving the highest
marks in the country for his Chartered
Director assessments.
IoD West Midlands visit to Birmingham Airport
West Midlands Mayor, Andy Street, at IoD West Midlands Annual Dinner
Dr Jason Wouhra receiving his OBE
2017 Overview | Annual Report and Accounts 2017
West Midlands
33www.iod.com
Dr Joanna BerryChair of IoD North East
Jon GeldartChair of Yorkshire and Humber
Annual Report and Accounts 2017 | 2017 Overview
It was a year of positive change in
Yorkshire and the North East with a
new headquarters in Leeds and two
new regional Chairs.
The relocation of our regional HQ to the
Grade II-listed Cloth Hall Court provides
a fantastic space, just across the
road from Leeds railway station, with
facilities for meetings and conferences.
Dr Joanna Berry, Associate Professor
in entrepreneurship at Durham
University Business School, was unveiled
as our new Chair for the North East
while Jon Geldart, Executive Director,
Markets Development, for Greater
China with Grant Thornton became our
Chair for Yorkshire and the Humber.
Both Joanna and Jon have welcomed
a string of Ambassadors as we look to
grow the profile of regional business
and ensure it is represented within the
IoD’s national policy voice.
Our Regional Director of the Year
Awards were once again a roaring
success, with Herwig Vennekens of
Haribo crowned overall winner in
front of 200 guests at The Principal
York hotel.
International music star Midge Ure was
the special guest speaker for our annual
Humber Luncheon, which kicked off
Humber Business Week 2017 in the year
that Hull celebrated being City of Culture.
In the North East, Sunday Times
columnist Rod Liddle entertained
speakers at the Business Leaders’
Dinner. Our South Yorkshire Annual
Dinner saw 200 guests descend on
the stunning Cutler’s Hall in Sheffield.
The EU has never been far from
members’ thoughts, so we were
delighted to host Allie Renison who
helped to provide clarity to those
befuddled by Brexit and provided
an opportunity to have a good old
fashioned debate!
Yorkshire & North East
IoD South Yorkshire Annual Dinner
IoD Yorkshire breakfast on Brexit
34 www.iod.com
Our Governance Structure
Governance | Annual Report and Accounts 2017
The Board | Approves strategy and leads the IoD to achieve long-term success
Non-Executive Chairman
• Leads the Board and Council and ensures it operates effectively
• Maintains a culture of openness and debate
• Ensures effective dialogue between the Board and members
Non–Executive Directors
• Work with and challenge executive directors
• Provide independent, external perspective
• Contribute a broad range of experience and expertise
Director General and
Executive Directors
• Day-to-day management of the business and implementation of strategy
Committee of the Board and Council
Nomination committee
• Leads process for Board and Council appointments
• Ensures the completion of an annual review of the performance of governance bodies with focus on the structure, size and composition of the Board and Council
• Ensuring that the Board and Council has a reasonable geographical distribution of members and a balance of diversity, sector and background
Committees of the Board
Audit and Risk Committee
• Oversees financial reporting, internal control, risk management systems and audit processes
Remuneration Committee
• Advises on the compensation and terms of employment for senior members of staff and executive directors
Membership Committee
• Advises on membership, diversity, member services provided by the IoD and membership conduct matters
Accreditation and Standards Committee
• Approves standards/competencies required by directors and boards and the methods for assessing directors
• Responsible for independent assurance of Chartered Director programme
• Ensures all current activity reflected in the academic regulations
Executive Committee
The Executive Committee is responsible for the ongoing management of the Institute. It considers day-to-day operational matters for running the business and reviews performance of the Institute and in line with the strategic plan. The Executive Committee generally meets on a monthly basis and is chaired by the Director General. The Director General then reports to the Board.
• Responsible for the development and implementation of the strategy
• The development and delivery of business plans and budgets
• Approval of procedures and policies
• The monitoring of operating and financial performance
• Health and safety management
35www.iod.com
Summary
Our governance structure is an
integral part of the way the Institute
of Directors delivers its Royal Charter
obligations and its strategy; supporting
effective decision-making and enabling
the right people to have access to the
right information at the right time.
Annual Report and Accounts 2017 | Governance
The Council
Guardian of the constitution to make sure that the Chartered Objects are being delivered
Council
• Appoints and removes the IoD non-executives and determines their independence
• Critiques and provides opinion to the Board on the overall progress of the IoD
• Holds the Board to account
• Monitors the Board’s engagement with membership and stakeholders
• Appoints and removes the senior independent council member
We are immensely proud of the
diversity and depth of experience
contained in our Board and Council,
all members, who are responsible
for the Institute’s strategic direction
and sustainability.
NOTE
1. As at May 2018
Male | 60% Male | 63%
The Council 1 The Board1
Female | 40% Female | 37%
36 www.iod.com
Governance and Control of the Institute
As a chartered organisation, initial
control of the Institute is vested in
the members and the Institute is
fundamentally controlled by the
Privy Council and in turn the Queen
in Council. The Institute does not have
owners and it is not subject to the
normal laws and regulations relating to
the operation of registered companies.
The Institute, however, is accountable
to the public as well as its members
and must therefore meet the public
interest test in pursuit of its objects.
The IoD is committed to a high standard
of governance and adopts best practice
recommendations as a guide to its own
governance. Our governance structure
shapes the way that information
flows throughout the Institute and we
constantly strive to improve our own
governance procedures and processes.
The relationship between the Board,
Council and committees as defined
in the Institute’s constitution are:
• The Queen in Council and Privy
Council granted the Institute its
Royal Charter and by-laws.
• The membership approve any
changes to the Royal Charter prior to
submission to the Queen in Council
and Privy Council who approve any
changes to the charter and by-laws.
• The Council is the guardian of the
constitution and considers any
changes to the constitution before
they are considered by membership.
• The Council also appoints Board
members, via the recommendations
of the Nomination Committee
(the joint committee of the Board
and Council) Council members
appointments are approved
by members at the Annual
General Meeting.
• The Board is responsible for the
overall leadership of the Institute
and for holding the executive to
account. The Board approves
the strategy and is responsible
for setting the Institute’s values,
standards, aims and objectives and
for delivering them in line with the
Charter Objects. The Board has a
number of sub-committees which
support its decision making across
the Institute. The sub-committees
of the Board are: the Audit and
Risk Committee, Remuneration
Committee, Membership Committee
and the Accreditation and Standards
Committee. There is also an
established geographic network,
which reports to Board via the
Director of Regional Engagement.
The Institute of Directors was established in 1903 and became a body corporate under Royal Charter in 1906. The IoD’s constitution comprises the charter, by-laws and regulations. The Institute’s principal office is at 116 Pall Mall, London, SW1Y 5ED. The Board is responsible for all of the affairs of the Institute and the council is the forum in which the Board is held directly accountable to the charter.
Governance statement | Annual Report and Accounts 2017
37www.iod.com
IoD Council
During 2017 the Council was chaired
by Lady Barbara Judge (non–executive
director). The Senior Independent
Council Member (SICM), Prof Dame
Joan Stringer is currently the acting
Chair of Council until a new Chair of
the Institute is appointed.
The Council is the guardian of the
constitution and is accountable to the
members of the Institute. The Council
is responsible for Board appointments
(via the Nomination Committee)
and reviewing the nature, focus and
performance of the Board’s activities
to ensure accountability. There is a
distinct separation of powers between
the Board and Council and for that
reason, apart from the IoD Chair,
there is no cross-membership
between both governing bodies.
The Council provides a pool of
expertise which the Director General
may consult when additional advice
or experience is needed.
In 2017, the Council met on three
occasions and discussed a number
of matters including Brexit,
membership, governance, financials
and Board appointments.
Elected Council Members Regional Council Members
Members
> Ceinwen Jean Church Dip.IoD FIoD
> Andrea Delay MBA
> Brian Hall CDir FIoD
> Roger Marsh OBE, BSc (Hons),
FCA, HonD Univ
> Professor Ian McKay
> David Sales BA (Hons) MA MBA
> Emma Sheldon MBE, MBA, FRSA
> Garry Smith CDir FloD
> Nick Sturge BEng CDir MIET
FIoD FRSA
> Paul Terrington LLB (Hons), MIPD
Member Departures
> Lady Barbara Judge CBE (Chair)
(March 2018)
> Alyson Howard FCCA DChA CF
(June 2017)
> Denis Lester MA CDir FinstD FCIM
Chartered Marketer (June 2017)
> Chris Parkhouse FIoD (June 2017)
> Robert Smith FIoD (June 2017)
> Margaret Wood MBE (June 2017)
> Dr Michael Young PHD FCA
(June 2017)
International Appointed Representative
> Rick Denton MBA ACIB TEP
MCSI DipIoD
Under 25 Directly AppointedRepresentative
> Declan Mulholland B.A
Chair
> Vacant
SICM
> Prof Dame Joan Stringer DBE FRSE
Members
> Ellen Miller BA PCC
> Sarah Soar MCSI
> David Trenchard
> Philip Warr BSc (Hons) FRICS
FIoD FRSA
> Laura Wyld
Annual Report and Accounts 2017 | Governance
%
Composition of the Council1
Elected Council Members | 39%
International Council Members | 5%Regional Council Members | 56%
NOTE
1. As at May 2018
%
Council Regional Representation1
Scotland | 11%
Northern Ireland | 5%
East of England | 6%
Wales | 5%
Channel Islands | 6%
East Midlands | 6%
South West | 11%West Midlands | 11%
North East | 11%North West | 6%South | 22%
38 www.iod.com
IoD Board
The Board is collectively responsible
for the long-term success of the
Institute and is responsible for
constructively challenging the executive
and helping to set the strategic
direction of the Institute. During 2017,
the Board was chaired by Lady Barbara
Judge. Chris Walton is currently the
acting Chair of the Board until a new
Chair of the Institute is appointed.
The Board consists of executive and
non-executive directors, the majority
of whom are non-executive directors.
The Board met five times during 2017
and discussed a number of issues,
which focused on: GDPR, cybersecurity,
membership, financials, IT projects,
IoD Academy and IoD Open House.
In 2017, the Board agreed that an
external board evaluation process
would be carried out in 2018,
the timing for which was deferred
to the Autumn in the light of the
recent Board departures.
Chair
> Vacant
Members
> Chris Walton BA MBA FIoD FRAeS
(Acting Chair)
> Dr Suzy Walton BSc MSc PhD CDir
CPsychol CSci FIoD FRSA
New Members
> Deborah Davis BAppSc MSc FIoD
(April 2018)
> Kirsty Lloyd-Jukes MA
(January 2018)
> Alex Simpson BA (Hons) (April 2018)
> John Watson BEng (Hons) MSc CA
(January 2018)
Member Departures
> Lady Barbara Judge CBE (Chair)
(March 2018)
> Erica Ingham BA ACMA CGMA
FIoD (March 2018)
> Sir Ken Olisa OBE (Deputy Chair)
(March 2018)
> Arnold Wagner OBE (March 2018)
Members
> Jim Jordan FCA (Finance Director)
> Stephen Martin BSc MBA FIoD
FRICS FCIOB CCMI MCIArb
(Director General)
Nomination Committee
The Nomination Committee leads
the process for Board, Council and
committee appointments. It is a sub-
committee of the Board and Council and
is chaired by the Senior Independent
Council Member (SICM) Prof Dame
Joan Stringer. The Nomination
Committee comprises of 3 Board
members,(selected by Board); 3 Council
members (selected by Council) and
two ex–officio members (the acting
Chairman of the Board and the SICM).
The Committee considers that the
Institute’s governing bodies consist
of individuals with the right balance
of skills, experience and knowledge
to provide strong and effective
leadership of the organisation.
The Nomination Committee held three
meetings during the year. At the meetings,
the committee reviewed the skills
matrix and succession planning
for Board roles and carried out the
appointment process for recruiting the
non – executive director appointments.
Chair
> Prof Dame Joan Stringer DBE FRSE
Members
> Sarah Soar MCSI
> Philip Warr BSc (Hons) FRICS
FIoD FRSA
New Members
> Kirsty Lloyd-Jukes MA (March 2018)
> Nick Sturge BEng CDir MIET FIoD
FRSA (April 2018)
> Dr Suzy Walton BSc MSc PhD
CDir CPsychol CSci FIoD FRSA
(March 2018)
> John Watson BEng (Hons) MSc CA
(March 2018)
Member Departures
> Lady Barbara Judge CBE
(March 2018)
> Erica Ingham BA ACMA CGMA FIoD
(March 2018)
> Sir Ken Olisa OBE (March 2018)
> Arnold Wagner OBE (March 2018)
Governance | Annual Report and Accounts 2017
Board Executive Directors
Board Non-Executives
%
Executive Directors | 25%
Composition of the Board1
NOTE
1. As at May 2018
Non-Executive Directors | 75%
39www.iod.com
Audit and Risk Committee (ARC)The Audit and Risk committee is chaired
by Chris Walton (non- executive
director). The Chair and members
of the ARC are appointed by the
Board. Two members of the ARC are
finance professionals and the Board
is satisfied that they have recent and
relevant financial experience. The other
committee members have experience
within the governance (chartered
director), commercial and legal sectors.
The committee held four meetings
during 2017 and has undertaken each
of its principal responsibilities, carrying
out a number of reviews and receiving
relevant reports from the external
auditors, internal accountants, the
institute secretary and management.
The findings from the reviews are then
reported to the Board.
The ARC is responsible for overseeing
the Institute’s relationship with
its external auditors and annually
reviewing the role and performance of
the external auditors. In doing so, the
ARC has assessed the audit process,
the effectiveness of the external
auditor and reviewed any non-audit
or independent services provided by
the external auditor to the Institute.
On the basis of these reviews, the ARC
has recommended to the board that in
their opinion the external auditors have
been effective and that they should
be re-appointed for an additional year.
The Board has full responsibility
for the Institute’s system of internal
control; however responsibility for this
is delegated by the board to the ARC.
For further information, please refer
to the Internal Control and Risk
Management Section on page 41.
Sub-committees of the Board
Audit and Risk
Chair
> Chris Walton BA MBA FIoD FRAeS
Members
> Andrew Rinker JD MBA BSc CDir
FIoD FRICS Chartered FCSI FCIArb
New Members
> John Watson BEng (Hons) MSc CA
(January 2018)
Member Departures
> Alyson Howard FCCA DCha CF
(June 2017)
> Erica Ingham BA ACMA CGMA FIoD
(March 2018)
Annual Report and Accounts 2017 | Governance
40 www.iod.com
Remuneration CommitteeDuring 2017 the Remuneration
Committee was chaired by Arnold
Wagner. It is currently chaired by Dr Suzy
Walton and its members are appointed
by the Board. A primary objective
of the Remuneration Committee is
to ensure that there is a formal and
transparent procedure for developing
a remuneration policy, which ensures
that individuals are sufficiently
compensated and are appropriately
incentivised to encourage enhanced
performance. The Remuneration
Committee aims to ensure that overall
levels of remuneration (including salary,
benefits and bonuses) are sufficient
to attract, retain and motivate staff.
The Remuneration Committee met
three times during 2017.
Remuneration Committee
Chair
> Suzy Walton BSc MSc PhD CDir
CPsychol CSci FIoD FRSA
New Members
> Kirsty Lloyd–Jukes MA (March 2018)
> Chris Walton BA MBA FIoD FRAeS
(March 2018)
Member Departures
> Lady Barbara Judge CBE
(March 2018)
> Sir Ken Olisa OBE (March 2018)
> Arnold Wagner OBE (March 2018)
Accreditation and Standards Committee (ASC)The Accreditation and Standards
Committee is chaired by Dr Suzy
Walton (non-executive director)
and members of the committee are
appointed by the board. The ASC
sets the educational competencies
and standards for directors and
boards, oversees the standards for
external accreditation providers and
maintains and protects the integrity
of the professional standards for
candidates for the principal professional
assessments conducted by and under
the auspices of the Institute. The ASC
met three times during 2017.
Accreditation and Standards
Chair
> Dr Suzy Walton BSc MSc PhD CDir
CPsychol CSci FIoD FRSA
Members
> Giorgio Bendoni MSc CDir FIoD
> Suzy Brain England OBE CDir
MBA BA (Hons)
> James Gambrell CDir BSc ICD.D
MBA DBA
> Robert Smith CDir FIoD
Membership CommitteeThe Membership Committee
is chaired by Ann Jordan and the
committee members are appointed
by the board. The committee advises
on membership, diversity, member
services provided by the IoD and
membership conduct matters.
The membership committee met
three times during 2017. A review
of the structure and composition
of the membership committee is
currently underway.
Chair
> Ann Jordan DL
Members
> Gerry Jones Hon FIoD
> John Knapton FIoD CDir
> Garry Smith CDir FIoD
> Adam Soliman BA (Hons)
> Josephine Swinhoe BSc CDir
FIoF FIoD
Member Departures
> Susan Wallace FCIS (August 2017)
Governance | Annual Report and Accounts 2017
41www.iod.com
Internal Control and Risk ManagementThe Board is responsible for setting
the Institute’s internal control systems,
risk framework and appetite for risk.
Key internal controls:
• During 2017, the Audit and Risk
Committee (“ARC”) has continued
to oversee the systematic scrutiny
of underlying finance processes
and systems. It has monitored the
introduction of improved procedures
to ensure robust financial controls
and records. This occurred as a
consequence of the introduction
of a CRM system which impacted
downstream systems (including
accounting systems), though it
amalgamated seven existing IT
systems. This exercise has been
beneficial, as the scrutiny of both
business and financial procedures
has prompted the redesign of a
number of underlying processes.
• Regular review of the management
accounts by the board and ARC
which allows for control over
financial reporting. During 2017,
monthly reporting was interrupted
due to the introduction of a CRM
IT system. During that period,
the ARC closely monitored the
organisation’s financial health.
• Review of the process for
managing conflicts of interest for
office holders, consultants, Board
members and honorary members.
The IoD’s insurance portfolio is
reviewed regularly; this ensures that the
Institute retains appropriate insurance
coverage across the business. The
Institute has an ‘Immediate Action
Plan’ and a longer-term ‘Disaster
Recovery Plan’ to help mitigate risks
in the likelihood of a disaster arising.
Both plans are regularly reviewed
and revised.
Institute SecretaryThe Joint Institute Secretaries are
responsible for the internal governance
of the IoD and act as the governance
advisors to the Board, Council and
various committees. They ensure that
the internal governance of the IoD is
delivered effectively and efficiently
by identifying and mitigating any
governance risks. They also deal with
legal, risk and assurance matters.
> Junior Bammeke ACIS
> Abigail Chase (Interim) LLB (Hons)
> Kristina Lewis (maternity leave)
The Institute has an ongoing process
for identifying, evaluating and
managing risks that it may face, and
this is done through the risk framework
and register. The risk register highlights
the key risks, the likelihood of risks
occurring, notes the associated
potential impacts, incorporates the
risk mitigation provisions and maps
the risk journey. The executive have
close day-to-day involvement with
the risk management. The ARC had
agreed that a review of the risk register
and framework will take place during
2018. This process allows the ARC to
monitor and review the effectiveness
of the Institute’s internal controls and
risk management systems.
The ARC regularly reviews the
operation and effectiveness of
the Institute’s risk management
mechanisms, financial controls, cash,
investment strategy, internal controls,
health and safety, premises, tax and
conducts several deep dives into risk
management, staff, data management
and IT. As a result, the ARC is able to
manage and mitigate the impact of
risk, rather than seeking to eliminate
the likelihood of risk as inherent
limitations exist in any system of risk
control and internal financial control.
Accordingly, even the most robust
system only provides reasonable, not
absolute, assurance with respect to risk
mitigation, the preparation of financial
information and the safeguarding of
reputation and assets.
Annual Report and Accounts 2017 | Governance
42 www.iod.com
2017 proved to be yet another bumper
year for UK Corporate Governance
both in terms of changes to the
regulatory framework and in the
work done by the IoD Corporate
Governance team.
We have seen the Financial
Reporting Council follow up on the
recommendations contained in the
Government’s response to the Green
Paper on Corporate Governance
Reform and instigate a consultation
into changes to the UK Corporate
Governance Code. While the IoD
in its response to this was broadly
supportive, we did express concerns
on a number of details. Most notable
is the proposal to move a section
which related to the professional
development of directors over to the
Guidance for Board Effectiveness which,
we have argued that the non-statutory
nature of the Guidance could lead to
this important aspect of governance
dropping off the agenda for boards.
A significant policy win for the
Corporate Governance team was the
recommendation from Government
for large private companies to report
on their governance arrangements.
The IoD argued for this in its Green
Paper response citing our own
expertise in this area seen in the
2010 IoD publication Corporate
Governance Guidance and Principles
for Unlisted Companies in the UK.
In addition to this the FRC has now
formed a coalition to produce its
own set of principles which would
voluntarily apply to the companies
coming under the new reporting
requirement. The IoD is a primary
partner in this initiative and is being
represented by Head of Corporate
Governance, Dr Roger Barker.
The Corporate Governance team
also garnered significant media
hits throughout 2017 with our most
notable public interventions focusing
on the Financial Conduct Authority’s
proposal to create a new premium
listing category for sovereign
controlled companies and on the
continued issue of excessive executive
pay. We opposed the FCA’s proposal
on the grounds that the relaxation
of certain shareholder protections
would be detrimental to our standing
as a global leader in Corporate
Governance. On the issue of excessive
executive pay the IoD repeatedly
intervened to highlight the effect this
has on the overall public impression
of the business community.
Finally, looking forward to 2018, the
IoD Corporate Governance team is
delighted to announce its intention
to create the IoD Centre for Corporate
Governance. Headed up by Dr Roger
Barker and supported by Corporate
Governance Analyst, James Jarvis,
the Centre will seek to produce a number
of distinct reports on salient issues in
governance. Each report will feature
contributions from key stakeholders in
the governance world and will aim to
provide practical and timely support
to practitioners, IoD members and the
wider UK business community.
Corporate Governance Policy | Annual Report and Accounts 2017
Corporate Governance Policy
Roger BarkerHead of Corporate Governance
James JarvisCorporate Governance Analyst
43www.iod.com
Statement of Board Responsibilities
In preparing the financial statements,
the Board is required to:
• select suitable accounting policies
and apply them consistently
• make informed judgments and
estimates that are reasonable
and prudent
• state whether applicable United
Kingdom accounting standards
have been followed, subject to
any material departures disclosed
and explained in the financial
statements
• prepare the financial statements on
the going concern basis unless it is
inappropriate to presume that the
institute will continue in operation
The Board is responsible for keeping
adequate accounting records that
disclose with reasonable accuracy at
any time the financial position of the
Institute. The Board is also responsible
for safeguarding the assets of the
Institute and taking reasonable
steps to ensure the prevention and
detection of fraud and any other
irregularities.
Each Board member confirms that:
• so far as they are aware, there is no
relevant audit information of which
the Institute’s auditor is unaware
• they have taken all necessary steps
to ensure that they are aware of
any relevant audit information
and to establish that the Institute’s
auditor is aware of the information
The Board is responsible for the
maintenance and integrity of the
financial information included on
the Institute’s website. Practice in
the United Kingdom governing the
preparation and dissemination of
financial statements may differ from
practice in other jurisdictions.
Annual Report and Accounts 2017 | Statement of Board Reesponsibilities
As a body corporate established by Royal Charter, the Institute is obliged to comply with its constitution (comprising charter, by-laws and regulations). The constitution requires that the Board lays before the members, in a general meeting, financial statements for the year which give a true and fair view of the state of affairs of the Institute. The financial statements must include the surplus or deficit of the Institute for that period. The Board is also required to approve the financial statements only if they are satisfied that they give a true and fair view of the state of affairs of the Institute and of the surplus or deficit for that period.
44 www.iod.com
Financial Review
Overall Results
This year returned a disappointing
position that resulted in a deficit, and
a worsening of result when compared
to the prior year. Revenue for the year
was down nearly 2% with total costs
increasing by 2%. Notwithstanding the
tough trading conditions, a conscious
decision was made to invest in both
capital expenditure and strategic
initiatives to position the IoD for
the future.
At 31 December 2017, the Accumulated
Fund stood at £8,204k compared
with £9,154 a year earlier, a decrease
of £950k which reflects the deficit
for the year.
At the end of 2017, the balance of
cash and cash equivalents, including
those held as investments, decreased
by £2,451k to £10,112k. Further details
of cash movements during the year
can be found in the Consolidated
Statement of Cash Flows.
Income
Membership IncomeMembership income fell by £337k
to £11,224k in 2017 (down 2.9%).
The reduction in income in 2017 was
due to a fall in overall membership
numbers by about 6%, though we have
witnessed growth during the same
period within our newest membership
propositions, IoD Advance and IoD99.
Membership contribution decreased
by £274k to £9,372 in 2017 (down 2.8%),
as shown in the Analysis of Operating
Surplus by Activities.
Revenue Earning ActivitiesIncome from revenue earning activities
decreased by £249k (1.8%) to £13,709k
with sales increases of over £100k in
Professional (Director) Development,
and sales decreases of over £100k
in Director Publications (this was
outsourced from May 2017) and
Director Events (there was the IoD
Annual Convention in 2016, that did
not take place in 2017). Professional
(Director) Development remained
as the area with the highest sales at
£7,233k which was nearly 11% up on
the prior year (2016: 24%). In the last
two years revenue from Professional
(Director) Development training has
increased by 37%.
Director Publications and the “Director”
magazine were outsourced from May
2017, to a third party contract publisher,
SevenC3.
Expenditure
Total expenditure of £27,458k was
£483k higher than the prior year,
and is analysed across Membership,
Revenue Earning Activities, Member
Services, Operating and Overhead
Costs and Representation and
Directorate, as shown in Analysis
of Operating Surplus by Activities
(note 2 to the financial statements).
Employment CostsEmployment costs are by far the
biggest costs incurred by the IoD.
In 2017, employment costs increased
by £27k (0.2%) to £11,010k.
Direct and Indirect CostsThere was an increase in direct and
indirect costs in the year as they rose
£664k (6%) to £12,143k. The main
increases were approximately £1,337k
in the delivery of Professional (Director)
Development services, where we
have also seen an uplift in income.
In addition, costs have decreased
by £641k within Hospitality.
Property ExpenditureOngoing property expenditure was
£183k higher in 2017, at £2,653k,
primarily as an increase in business rates.
Capital ExpenditureCapital expenditure of £2,034k was
incurred during the year which was
£928k higher than in 2016.
The main item of expenditure was
£1.2m on the new Training Academy
on the 3rd Floor of our Pall Mall
headquarters. This project was
delivered within budget and on time,
which was a great success.
Financial Review | Annual Report and Accounts 2017
45www.iod.com
Creditor Payment PolicyThe Institute was one of the founding
members of the Prompt Payment
Code and is a supporter and signatory
of the scheme:
www.promptpaymentcode.org.uk
For all trade creditors, it is the
Institute’s policy to agree terms of
payment with suppliers, at the start of
business, and to ensure that they are
paid in accordance with the agreed
contractual and other legal obligations.
The trade creditors balance at
31st December 2017 represented
an average payment period of
approximately 32 days, based on the
ratio of the Institute’s trade creditors to
the amounts invoiced during the year.
DonationsThere were no charitable donations
made during the year (2016: £nil).
2017 also saw no political donations
(2016: £nil).
Cash ReservesThe Audit and Risk Committee has
recommended, and the Board has
agreed, that cash reserves, net of
deferred membership income,
are set at a level sufficient to cover
both short term and longer term
investment needs.
Going ConcernThe Board considers that the Institute
has adequate resources to continue in
operational existence for the foreseeable
future. For this reason, the going
concern basis continues to be adopted
in preparing the financial statements.
Annual Report and Accounts 2017 | Financial Review
46 www.iod.com
Independent Auditor’s Report
OpinionWe have audited the non-statutory
consolidated financial statements
(“the financial statements”) of the
Institute of Directors (“the Institute”) for
the year ended 31 December 2017, which
comprise the consolidated statement
of income and retained earnings,
the consolidated balance sheet,
consolidated statement of cash flows,
and the related notes to the financial
statements, including a summary of
significant accounting policies.
The financial reporting framework that
has been applied in their preparation
is applicable law and United Kingdom
Accounting Standards, including
Financial Reporting Standard 102
‘The Financial Reporting Standard
applicable in the UK and Republic of
Ireland’ (United Kingdom Generally
Accepted Accounting Practice).
These financial statements were
prepared solely for the purposes of
management of the Institute’s affairs,
and have not been prepared under
section 394 of the Companies Act
2006 and are not statutory financial
statements. Our audit work has been
undertaken so that we might state to
the Institute’s Directors those matters
we are required to state to them in
an auditor’s report and for no other
purpose. To the fullest extent permitted
by law, we do not accept or assume
responsibility to anyone other than the
Institute and the Institute’s Board as a
body, for our audit work, for this report,
or for the opinions we have formed.
In our opinion, the financial statements:
• give a true and fair view of the
state of the Institute’s affairs as
at 31 December 2017 and of its
income and expenditure for the
year then ended; and
• have been properly prepared in
accordance with United Kingdom
Generally Accepted Accounting
Practice.
Basis for opinionWe conducted our audit in accordance
with International Standards on Auditing
(UK) (ISAs (UK)) and applicable
law. Our responsibilities under those
standards are further described in the
Auditor’s responsibilities for the audit
of the financial statements section of
our report. We are independent of the
Institute in accordance with the ethical
requirements that are relevant to our
audit of the financial statements in the
United Kingdom, including the Financial
Reporting Council’s Ethical Standard,
and we have fulfilled our other ethical
responsibilities in accordance with
these requirements. We believe that
the audit evidence we have obtained
is sufficient and appropriate to provide
a basis for our opinion.
Conclusions relating to going concernWe have nothing to report in respect
of the following matters in relation
to which the ISAs (UK) require us to
report to you where:
• the Board’s use of the going
concern basis of accounting in
the preparation of the financial
statements is not appropriate; or
• the Board has not disclosed in the
financial statements any identified
material uncertainties that may cast
significant doubt about the Institute’s
ability to continue to adopt the going
concern basis of accounting for a
period of at least twelve months
from the date when the financial
statements are authorised for issue.
Other informationThe Board is responsible for the other
information. The other information
comprises the information included
in the annual report and financial
statements, other than the financial
statements and our auditor’s report
thereon. Our opinion on the financial
statements does not cover the other
information and, except to the extent
otherwise explicitly stated in our
report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the
financial statements, our responsibility
is to read the other information and, in
doing so, consider whether the other
information is materially inconsistent
with the financial statements or our
knowledge obtained in the audit or
otherwise appears to be materially
misstated. If we identify such material
inconsistencies or apparent material
misstatements, we are required
to determine whether there is a
material misstatement in the financial
statements or a material misstatement
of the other information. If, based
on the work we have performed,
we conclude that there is a material
misstatement of this other information,
we are required to report that fact.
We have nothing to report in this regard.
Opinion on other mattersIn our opinion, based on the work
undertaken in the course of the audit
the information given in the annual
report for the financial year for which
the financial statements are prepared
is consistent with the financial
statements.
Independent Auditor’s Report | Annual Report and Accounts 2017
47www.iod.com
Buzzacott LLP
Chartered Accountants
130 Wood Street
London
EC2V 6DL
8th June 2018
Annual Report and Accounts 2017 | Independent Auditor’s Report
Matters on which we are required to report by exceptionIn the light of the knowledge and
understanding of the Institute and its
environment obtained in the course of
the audit, we have not identified material
misstatements in the annual report.
We have nothing to report in respect
of the following matters which we
are required to report to you if,
in our opinion:
• adequate accounting records have
not been kept, or returns adequate
for our audit have not been received
from branches not visited by us; or
• the financial statements are not
in agreement with the accounting
records and returns; or
• certain disclosures of directors’
remuneration specified by law
are not made; or
• we have not received all the
information and explanations
we require for our audit.
Responsibilities of the BoardAs explained more fully in the
Statement of Board’s Responsibilities
within the annual report, the Board
is responsible for the preparation of
the financial statements and for being
satisfied that they give a true and fair
view, and for such internal control as
the Board determine is necessary to
enable the preparation of financial
statements that are free from material
misstatement, whether due to fraud
or error.
In preparing the financial statements,
the Board are responsible for assessing
the Institute’s ability to continue
as a going concern, disclosing, as
applicable, matters related to going
concern and using the going concern
basis of accounting unless the Board
either intend to liquidate the Institute
or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statementsOur objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an Auditor’s
report that includes our opinion.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit conducted in accordance
with ISAs (UK) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud
or error and are considered material
if, individually or in the aggregate,
they could reasonably be expected
to influence the economic decisions
of users taken on the basis of these
financial statements.
A further description of our
responsibilities for the audit of the
financial statements is located on the
Financial Reporting Council’s website at
www.frc.org.uk/auditorsresponsibilities.
This description forms part of our
Auditor’s report.
48 www.iod.com
Notes 2017 2016
2. INCOME £’000 £’000
Membership income 11,224 11,561
Revenue earning activities 13,709 13,958
Other trading income 1,471 1,416
Interest receivable and similar income 65 107
26,469 27,042
2. EXPENDITURE
3. Employment costs 11,010 10,983
Direct and indirect costs 12,143 11,479
Property expenditure 2,653 2,470
Gain on disposal of fixed assets 2 768
Depreciation 1,650 1,275
27,458 26,975
2. & 4. (Deficit)/surplus before taxation (989) 67
5. Taxation 0 (50)
(Deficit)/surplus after taxation (989) 17
17.
Other comprehensive income
Closed defined benefit pension scheme adjustment 39 48
Total comprehensive income (950) 65
Accumulated funds at 1st January 9,154 9,089
Accumulated funds at 31st December 8,204 9,154
All operations in the year and in the comparative year were continuing.
Consolidated Income and Retained Earnings – for the year ended 31st December 2017 | Annual Report and Accounts 2017
49www.iod.com
Annual Report and Accounts 2017 | Consolidated Balance Sheet – at 31st December 2017
Notes 2017 2016
FIXED ASSETS £’000 £’000
6. Tangible fixed assets 4,590 3,981
7. Intangible fixed assets 898 1,123
5,488 5,104
CURRENT ASSETS
8. Debtors 3,420 3,778
9. Cash at bank and in hand 10,112 12,563
13,532 16,341
CURRENT LIABILITIES
10. Creditors – amounts falling due within one year (4,216) (4,702)
11. Provision for liabilities and charges 0 (263)
12. Deferred membership income (4,900) (5,257)
Total current liabilities (9,116) (10,222)
Net currents assets 4,416 6,119
Total assets less current liabilities 9,904 11,223
50 www.iod.com
8th June 2018 8th June 2018 8th June 2018
Consolidated Balance Sheet – at 31st December 2017 | Annual Report and Accounts 2017
Notes 2017 2016
NON CURRENT LIABILITIES £’000 £’000
12. Creditors – amounts falling due after more than one year (1,700) (2,069)
Net assets including pension liability 8,204 9,154
Represented by:
Accumulated funds at 31st December 8,204 9,154
The financial statements on pages 48 to 66 were approved by the Board on 2nd May 2018 and were signed on its behalf by:
Chris WaltonActing Chair of the Board
Stephen MartinDirector General
Jim JordanFinance Director
51www.iod.com
Annual Report and Accounts 2017 | Consolidated Statement of Cash Flows – for the year ended 31st December 2017
Notes 2017 2016
£’000 £’000
Net cash (used in) / provided by operating activities (note A) (482) 94
Cash flows from investing activities
Interest received 65 107
Purchase of tangible and intangible fixed assets (2,034) (1,106)
Net cash used in investing activities (1,969) (999)
Change in cash and cash equivalents in the year (2,451) (905)
Cash and cash equivalents at 1st January 12,563 13,468
Cash and cash equivalents at 31st December (note B) 10,112 12,563
A Reconciliation of net (deficit) surplus for the year
to net cash flows from operating activities
(Deficit) / surplus for the year (989) 17
Adjustments for:
Taxation charge 0 50
Tax paid (50) (6)
Depreciation on tangible and intangible fixed assets 1,648 1,275
Loss on disposal of fixed assets 2 768
Interest receivable and similar income (65) (107)
Decrease / (increase) in debtors 358 (1,342)
Decrease in stock 0 135
Increase in trade creditors 301 302
(Decrease) / increase in other creditors, accruals and provisions (1,162) 201
Decrease in multiple years’ advance membership over one year (369) 0
Decrease in deferred membership income (357) (718)
Increase / (decrease) in other deferred income 162 (529)
Difference between pension charge and cash contributions 39 48
Net cash (used in) / provided by operating activities (482) 94
B Analysis of cash and cash equivalents
Cash at bank and in hand 10,112 12,563
52 www.iod.com
The Institute of Directors (the “Institute”)
is not subject to the Companies
Act 2006. However, these financial
statements have been prepared in
accordance with applicable Accounting
Standards in the United Kingdom and
incorporate the disclosures required
by the Companies Act 2006 in respect
of directors’ emoluments for a private
limited company.
The principal accounting policies
adopted, judgements and key sources
of estimation uncertainty in the
preparation of the accounts are laid
out below.
Basis of Accounting and ConsolidationThese financial statements have
been prepared for the year to
31st December 2017.
The financial statements comprise
the consolidated accounts of the
Institute, its wholly owned subsidiaries,
The Director Publications Limited, IoD
Management Limited, iod.com Limited,
and Tomorrow’s Directors Limited
and the net revenue and assets of its
branches. Financial statements for the
Institute of Directors alone have not
been presented.
The financial statements have been
prepared under the historical cost
convention with items recognised
at cost or transaction value unless
otherwise stated in the relevant
accounting policies below or the
notes to these accounts.
The financial statements have
been prepared in accordance with
the Financial Reporting Standard
applicable in the UK and Republic
of Ireland (FRS 102).
The financial statements are presented
in sterling and are rounded to the
nearest thousand pounds.
Critical Accounting Estimates and Areas of JudgementPreparation of the accounts requires
the Board and management to make
significant judgements and estimates.
The items in the financial statements
where these judgements and
estimates have been made include:
• The depreciation / amortisation
charge for the year which is based
on the estimate of the useful
economic lives attributed to the
relevant assets; and
• The provisions made in respect
of bad or doubtful debts;
Assessment of Going ConcernThe Board has assessed whether the
use of the going concern assumption
is appropriate in preparing these
financial statements. The Board have
made this assessment in respect to a
period of one year from the date of
approval of these financial statements.
The Board has concluded that there
are no material uncertainties related
to events or conditions that may cast
significant doubt on the ability of
the Institute to continue as a going
concern. The Board is of the opinion
that the Institute will have sufficient
resources to meet its liabilities as
they fall due.
Membership IncomeAnnual membership subscriptions are
recognised as income on an accruals
basis applicable to the membership
period, and part of the subscription
applicable to the following year is
carried forward as deferred income.
In the case of multiple year membership
subscriptions, an annual allocation is
included within income for the year,
the unutilised income being carried
forward to future years.
Election fees are accounted for
on a receipts basis.
Revenue Earning ActivitiesRevenue earning activities income
consists of member services that
are recognised when the service is
provided and risks and benefits have
been transferred.
Note 1 Accounting Policies
Notes to the Financial Statements – for the year ended 31st December 2017 | Annual Report and Accounts 2017
53www.iod.com
Annual Report and Accounts 2017 | Notes to the Financial Statements – for the year ended 31st December 2017
Tangible Fixed Assets Tangible fixed assets are recorded
at historic cost, together with any
incidental costs of acquisition.
Depreciation is calculated on a straight
line basis over the expected useful
economic lives of the assets concerned.
The principal annual rates used for this
purpose are:
Foreign CurrenciesAssets and liabilities in foreign
currencies are translated into sterling
at the rates of exchange ruling at
the balance sheet date. Transactions
in foreign currencies are translated
into sterling at the rate of exchange
ruling at the date of the transaction.
Exchange differences are taken to
the statement of income and retained
earnings in arriving at the net surplus
for the year.
Creditors and ProvisionsCreditors and provisions are recognised
when there is an obligation at the
balance sheet date as a result of a past
event, it is probable that a transfer
of economic benefit will be required
in settlement, and the amount of the
settlement can be estimated reliably.
Creditors and provisions are recognised
at the amount the Institute anticipates
it will pay to settle the debt. They have
been discounted to the present value
of the future cash payment where
such discounting is material.
ExpenditureLiabilities are recognised as expenditure
as soon as there is a legal or constructive
obligation committing the institute to
make a payment to a third party, it is
probable that a transfer of economic
benefits will be required in settlement
and the amount of the obligation can
be measured reliably. All expenditure
is accounted for on an accruals basis
and excludes recoverable VAT.
Property MaintenanceUnder the terms of the various
leases held by the Institute there is
an obligation to keep the relevant
properties in a proper state of repair
together with the rentals are charged
as incurred. In addition, and where
necessary, the Institute sets aside a
provision for expenditure required to
bring the property back to a proper
start of repair. Such provisions are
discounted to the present value of
the future cash payment where such
discounting is material. For 116 Pall
Mall, which is held under a lease
expiring in 2043, the public areas
of the building are maintained to a
standard which is consistent with
their revenue earning potential.
Leased AssetsRentals applicable to operating leases
where substantially all of the benefits
and risks of ownership remain with the
lessor are charged to the Consolidated
Statement of Income and Retained
Earnings on a straight-line basis over
the term of the lease.
Pension SchemeThe Institute operates both a non-
contributory defined contribution
pension scheme for benefits accruing
from 1 January 1997 and a closed
defined benefit pension scheme.
Pension costs for the defined
contribution scheme are charged
to the Consolidated Statement of
Income and Retained Earnings when
they are payable to the scheme.
For the closed defined benefit pension
scheme, finance income is credited to
the Consolidated Statement of Income.
As the scheme is in surplus, the surplus
is not carried on the balance sheet in
accordance with the requirements of
FRS 102. Accordingly, a corresponding
adjustment equivalent to the finance
income is recognised within other
comprehensive income.
Intangible AssetsThe cost of acquired computer
software licenses is capitalised.
These costs are amortised over their
expected useful lives – up to five years.
Costs incurred on development
projects relating to the design
or improvement of systems are
recognised as intangible assets
when the recognition criteria set
out in FRS 102 is met. Capitalised
development costs are amortised
from the date available for use of
the system over their expected useful
lives – not exceeding five years.
Research expenditure is recognised
as an expense as incurred.
Cash at Bank and In HandCash at bank and in hand represents
such accounts and instruments that
are available on demand or have a
maturity of less than three months
from the date of acquisition.
Note 1 Accounting Policies (continued)
Leasehold
improvements
10% or the
period of
the lease if
lower
Computers,
furniture & fittings
20%
54 www.iod.com
Notes 2017 Income
2017 Expenditure
2017 Net
2016 Net
2. ANALYSIS OF OPERATING SURPLUS BY ACTIVITIES £’000 £’000 £’000 £’000
Membership income 11,224 (1,852) 9,372 9,646
Revenue earning activities
Hospitality 2,769 (1,898) 871 314
Director Publications 544 (1,321) (777) (351)
Professional Development 7,233 (4,067) 3,166 3,793
Office Solutions 327 (116) 211 234
Business Centre 1,642 (598) 1,044 1,031
Director Events 461 (445) 16 (159)
Commercial (Product Marketing) 733 (137) 596 495
13,709 (8,582) 5,127 5,357
Member services
Regional Services 1,384 (3,117) (1,733) (1,660)
Information and Advisory Services 6 (791) (785) (801)
Member Benefits 30 (547) (517) (493)
1,420 (4,455) (3,035) (2,954)
Policy and directorate 51 (1,971) (1,920) (2,243)
Operating and overhead costs
Property costs (excluding regions) 0 (2,653) (2,653) (2,288)
Loss on disposal of fixed assets 0 (2) (2) (768)
Depreciation 0 (1,650) (1,650) (1,275)
IT, iod.com, marketing and new initiatives 0 (3,352) (3,352) (3,005)
Central Administration 0 (2,941) (2,941) (2,510)
0 (10,598) (10,598) (9,846)
Interest Receivable 65 0 65 107
Deficit / (surplus) on ordinary activities before taxation 26,469 (27,458) (989) 67
Notes to the Financial Statements – for the year ended 31st December 2017 | Annual Report and Accounts 2017
55www.iod.com
Annual Report and Accounts 2017 | Notes to the Financial Statements – for the year ended 31st December 2017
Notes 2017 2016
3. EMPLOYMENT COSTS £’000 £’000
a) The average number of employees during the year was: 197 212
b) Salaries 7,528 7,653
Social security 860 831
Pension costs – see note 17 653 690
Contracted and temporary staff 659 753
Subsistence and insurance 169 267
Redundancy, termination & ex gratia payments 290 126
Other 851 663
11,010 10,983
c) The fees paid to the Chairman totalled £20,960 during the year (2016: £20,000).
d) Emoluments paid to the Director General, who is the highest paid
Director, amounted to:
£’000 £’000
- Salary 436 306
- Payment in lieu of employer pension contribution 29 37
- Bonus 36 11
- Benefits 18 1
- Pension contributions 8 0
527 355
e) Executive directors’ emoluments £’000 £’000
Director General – 3(d) above 527 355
2 other directors (2016: 3 directors)
- Salaries 116 131
- Bonus 0 2
- Benefits 0 2
116 135
Aggregate emoluments 643 490
Aggregate value of pension contributions paid
in respect of money purchase benefits
Director General – 3(d) above 8 0
2 other directors (2016: 3 directors) 13 16
21 16
56 www.iod.com
Notes 2017 2016
3. EMPLOYMENT COSTS (CONTINUED) £’000 £’000
f) Emoluments paid to key management
9 key management including the Director General and other
executive directors (2016: 9 key management)
- Salaries 933 871
- Bonus 50 27
- Benefits 26 7
1,009 905
- Pension contributions 63 61
1,072 966
Director’s emoluments disclosures have been prepared in compliance with Companies Act requirements for a limited company.
Notes to the Financial Statements – for the year ended 31st December 2017 | Annual Report and Accounts 2017
57www.iod.com
Annual Report and Accounts 2017 | Notes to the Financial Statements – for the year ended 31st December 2017
Notes 2017 2016
4. (DEFICIT) / SURPLUS AFTER TAXATION £’000 £’000
This is stated after charging:
Fees in respect of services provided by the auditor:
Statutory audit 41 61
Tax advisory services 26 17
67 78
5. TAXATION £’000 £’000
Current tax:
UK corporation tax 0 (50)
Tax reconciliation:
(Deficit) / surplus on ordinary activities before taxation (989) 67
Multiplied by the standard rate of UK corporation tax of 19.25% (190) 13
Tax effect of: Deficit / (surplus) arising on non-taxable activity
and non deductible expenditure
(55) 37
Movement in deferred tax not recognised 245 0
0 50
Corporation tax is payable only on the Institute’s externally derived sources of income. The Institute’s membership activities
are outside the charge to corporation tax.
No provision for deferred taxation is required (2016 – £nil).
Factors that may affect future tax charges:
During the accounting period, the UK corporation tax rate reduced to 19% on 1st April 2017 (2016 – 20%).
Legislation has also been enacted to reduce the corporation tax to 17% from 1st April 2020.
58 www.iod.com
Notes Leasehold Improvements
Furniture & Fittings
Computer Hardware
Total
6. TANGIBLE FIXED ASSETS £’000 £’000 £’000 £’000
Cost:
At 1st January 2017 7,947 2,816 2,096 12,859
Additions 512 1,177 145 1,834
Disposals (3,464) (1,373) (1,593) (6,430)
At 31st December 2017 4,995 2,620 648 8,263
Depreciation:
At 1st January 2017 (5,118) (1,912) (1,848) (8,878)
Charge for the year (710) (372) (141) (1,223)
Disposals 3,464 1,373 1,591 6,428
At 31st December 2017 (2,364) (911) (398) (3,673)
Net book value 2017 2,631 1,709 250 4,590
Net book value 2016 2,829 904 248 3,981
The Institute does not hold any assets under finance leases (2016: £ nil).
Computer Software
7. INTANGIBLE FIXED ASSETS £’000
Cost:
At 1st January 2017 1,309
Additions 200
Disposals (110)
At 31st December 2017 1,399
Depreciation:
At 1st January 2017 (186)
Charge for the year (425)
Disposals 110
At 31st December 2017 (501)
Net book value 2017 898
Net book value 2016 1,123
Notes to the Financial Statements – for the year ended 31st December 2017 | Annual Report and Accounts 2017
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Annual Report and Accounts 2017 | Notes to the Financial Statements – for the year ended 31st December 2017
Notes 2017 2016
8. DEBTORS £’000 £’000
Trade debtors 2,466 2,768
Other debtors and prepayments 798 845
VAT receivable 156 165
3,420 3,778
All debtors are due within one year.
2017 2016
10. CREDITORS – AMOUNTS FALLING DUE WITHIN ONE YEAR £’000 £’000
Trade creditors 1,725 1,424
Deferred non membership income 1,448 1,286
Other creditors and accruals 1,043 1,942
Taxation 0 50
4,216 4,702
2017 2016
9. SHORT TERM BANK DEPOSIT, CASH AT BANK AND IN HAND £’000 £’000
Cash at bank and in hand 10,112 12,563
Cash at bank and in hand includes £213,223 (2016: £217,540) held in overseas branches.
60 www.iod.com
2017 2016
12. DEFERRED MEMBERSHIP INCOME £’000 £’000
Memberships expiring within one year 4,900 5,257
Memberships expiring after more than one year 1,700 2,069
6,600 7,326
Membership subscriptions received in advance include cash received for annual memberships for which benefits are
owed to members until the expiry date of their membership. It also includes cash received for lifetime subscriptions
which are released to income over a period of eighteen years.
Notes Property provisions
11. PROVISION FOR LIABILITIES AND CHARGES £’000
Movements in the provisions are as follows:
At 1st January 2017 263
Change in year (263)
At 31st December 2017 0
The provision of dilapidation and professional fees of 123 Pall Mall was utilised during the year. At 31st December 2017,
there was no further provisions required.
Notes to the Financial Statements – for the year ended 31st December 2017 | Annual Report and Accounts 2017
61www.iod.com
Annual Report and Accounts 2017 | Notes to the Financial Statements – for the year ended 31st December 2017
14. CAPITAL COMMITMENTS
Capital commitments contracted but not provided for in the financial statements amount to £50,000.
15. RELATED PARTY TRANSACTIONS
The remuneration payable to the Institute’s Chairman and Directors are disclosed in note 3 to these accounts.
There were no other transactions with related parties during the year.
16. POST BALANCE SHEET EVENTS
As mentioned in the Acting Chair of the Board’s Report, in the past year, the IoD faced a governance challenge when
allegations were made through our whistleblowing channel. The Board does not believe that the IoD will incur any
legal liabilities as a consequence of these events.
Notes 2017 Property
2017 Other
2017 Total
13. LEASE COMMITMENTS £’000 £’000 £’000
At 31st December, the Institute has total future minimum lease
payments under non-capable operating leases as follows:
Within one year 458 12 470
After one, but within five years 1,687 11 1,698
After five years 6,753 0 6,753
8,898 23 8,921
2016
Property
2016
Other
2016
Total
£’000 £’000 £’000
Within one year 423 7 430
After one, but within five years 1,279 14 1,293
After five years 6,953 0 6,953
8,655 21 8,676
62 www.iod.com
At 31st December
2017
At 31st December
2016
At 31st December
2015
a) Balance sheet and notes £’000 £’000 £’000
The major assumptions for FRS 102 purposes were:
Rate of increase in salaries n/a n/a n/a
Rate of increase to pensions in payment (Post 88 GMP) 2.1% 2.1% 1.8%
Rate of increase to pensions above GMP in deferment 2.5% 2.5% 2.0%
Discount rate 2.3% 2.5% 3.6%
RPI inflation assumption 3.5% 3.5% 3.0%
CPI inflation assumption 2.5% 2.5% 2.0%
No contributions were paid to the scheme during the year (2016: Nil). The amounts charged and credited to the
consolidated statement of income and retained earnings are detailed in sections b and c below; the total charge
for 2017 was £39,000 (2016: £48,000).
No lump sum contributions are due in the coming year in respect of the scheme (2017: Nil).
Notes
17. PENSION COSTS
The Institute of Directors operates both a non-contributory defined contribution pension scheme for benefits
accruing from 1st January 1997 and a closed defined benefit pension scheme. The assets of both schemes are held
separately from those of the Institute in independently administered funds. Further details of the cost of each
scheme are provided below.
Defined contribution scheme
Contributions are charged to the Consolidated Statement of Income in accordance with the rules of the scheme.
The charge associated with this scheme was £614,000 (2016: £690,000), representing the employer contributions
payable during the year.
Defined benefit scheme
With effect from 1st January 1997, this scheme became closed to new entrants and ceased to provide any further
benefit accrual to the then active members who became entitled to deferred pensions, subject to statutory
revaluation as from that date.
The last full funding valuation was carried out as at 1st January 2015. A qualified independent actuary carried out
calculations as at 31st December 2017 to obtain the amounts reported under FRS 102.
Notes to the Financial Statements – for the year ended 31st December 2017 | Annual Report and Accounts 2017
63www.iod.com
Annual Report and Accounts 2017 | Notes to the Financial Statements – for the year ended 31st December 2017
Notes Discount rate at 31st December
2017
Value at 31st
December 2017
Discount rate at 31st December
2016
Value at 31st
December 2016
Discount rate at 31st December
2015
Value at 31st
December 2015
17. PENSION COSTS (CONTINUED)
Defined benefit scheme (continued)
a) Balance sheet and notes
(continued)
£’000 £’000 £’000
Under FRS 102 the long term expected
rate of return is replaced by the discount
rate. The assets in the scheme and the
expected rates of return were:
Equities 2.3% 3,264 2.5% 3,102 3.6% 2,829
Bonds 2.3% 4,738 2.5% 4,654 3.6% 4,180
Cash 2.3% 54 2.5% 75 3.6% 42
Total market value of assets 2.3% 8,056 2.5% 7,831 3.6% 7,051
Present value of scheme liabilities 6,762 6,866 5,965
Surplus in the scheme 1,294 965 1,086
Deemed irrecoverable (1,294) (965) (1,086)
Balance sheet valuation 0 0 0
At 31st December
2017
At 31st December
2016
Reconciliation of present value of scheme liabilities: £’000 £’000
Opening defined benefit obligation (6,866) (5,965)
Service cost 0 0
Administration costs (62) (86)
Interest cost (168) (207)
Remeasurement: actuarial loss (87) (1,116)
Benefits paid and expenses 421 508
Closing defined benefit obligation (6,762) (6,866)
64 www.iod.com
Notes At 31st December
2017
At 31st December
2016
17. PENSION COSTS (CONTINUED)
Defined benefit scheme (continued)
Reconciliation of fair value of scheme assets: £’000 £’000
Opening fair value of scheme assets 7,831 7,051
Interest income 191 245
Investment gain 455 1,043
Contribution by employer 0 0
Benefits paid and expenses (421) (508)
Closing fair value of scheme assets 8,056 7,831
Current Year 2017
Previous Year 1 2016
Previous Year 2 2015
Previous Year 3 2014
Previous Year 4 2013
£’000 £’000 £’000 £’000 £’000
Defined benefit obligation (6,762) (6,866) (5,965) (6,501) (5,772)
Scheme assets 8,056 7,831 7,051 7,451 6,864
Surplus 1,294 965 1,086 950 1,092
Experience adjustments on scheme liabilities (25) (10) (30) (111) (60)
Experience adjustments on scheme assets
(2014: restated under FRS 102)
455 1,126 (127) 654 176
At 31st December
2017
At 31st December
2016
b) Analysis of amount charged to the consolidated revenue account £’000 £’000
Current service cost 0 0
Administration costs 62 86
Total operating charge62 86
At 31st December
2017
At 31st December
2016
c) Analysis of amount credited to other finance income £’000 £’000
Interest income 191 245
Less: Interest on pension scheme liabilities (168) (207)
Net return 23 38
Notes to the Financial Statements – for the year ended 31st December 2017 | Annual Report and Accounts 2017
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Annual Report and Accounts 2017 | Notes to the Financial Statements – for the year ended 31st December 2017
Notes At 31st December
2017
At 31st December
2016
17. PENSION COSTS (CONTINUED)
Defined Benefit Scheme (continued)
d) Total amounts taken to other comprehensive income £’000 £’000
Remeasurement – gain / (loss)
Return on scheme assets excluding interest income
455 1,043
Remeasurement – gain / (loss)
Experience gain / (loss) arising on scheme liabilities
(25) 10
Remeasurement – gain / (loss)
Changes in financial assumptions underlying the scheme liabilities – gain / (loss)
(210) (1,126)
Remeasurement – gain / (loss)
Changes in demographic assumptions underlying the scheme liabilities – gain / (loss)
148 0
(Increase) / decrease in irrecoverable surplus (329) 121
Actuarial gain recognised in other comprehensive income 39 48
As the pension surplus is irrecoverable, the increase of £329,000 has been treated as a pension scheme adjustment
in other comprehensive income in 2017.
At 31st December
2017
At 31st December
2016
e) Movements in surplus during the year £’000 £’000
Surplus in scheme at beginning of the year 965 1,086
Movements in the year:
Current service cost 0 0
Contributions 0 0
Other finance income (39) (48)
Actuarial gain / (loss) 368 (73)
Surplus in scheme at the end of the year 1,294 965
66 www.iod.com
1% pa
increase
1% pa
decrease
Discount rate (£850k) £1,085k
Price inflation £348k (£320k)
Notes
17. PENSION COSTS (CONTINUED)
Defined Benefit Scheme (continued)
Sensitivity to changes in assumptions:
The assumptions as to discount rate and price inflation have a significant effect on the value placed on the defined
benefit obligations. As at 31 December 2017, a 1% pa change to these assumptions would have had the following
effects on the closing defined benefit obligation:
f) Demographic Assumptions used are as follows:
31st December 2017 (Changes from 31st December 2016)
Mortality (pre and post retirement) S2PxA, CMI_2016 (1.5%)
Proportion married 90% for men and 70% for women
Age difference Husbands 3 years older than wives
Age at retirement Normal pension age
Cash Commutation 90% of maximum cash allowance
Notes to the Financial Statements – for the year ended 31st December 2017 | Annual Report and Accounts 2017
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Annual Report and Accounts 2017 | Governance
Front of 116 Pall Mall
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Governance | Annual Report and Accounts 2017
East Midlands
Garry Smith
East of England
David Sales
London
David Stringer-Lamarre
North East
CDr Joanna Berry
North West
Mike Blackburn OBE
South
Alex Pratt OBE
South West
Nick Sturge
West Midlands
Dr. Jason Wouhra OBE
Yorkshire and the Humber
Jon Geldart
Northern Ireland
Gordon Milligan
Scotland
Susan Deacon
Wales
Jean Church
Aberdeen
Mark McCue
Bath and Wiltshire
Guy Tullberg
Berkshire
Susan Elliott
Black Country
Ian Priest
Bristol
Lhosa Daly
Buckinghamshire
Allan Goodbrand
Cambridgeshire
Carolyn Rand
Central London
David Gordon
Cheshire
Bill Carr
City of London
Alastair Naisbitt King
Coventry & Warwickshire
David Trevis-Smith
Cumbria
Chris Ward
Devon and Cornwall
James Jordan
Dorset
Gillian Donnell MBE
East Yorkshire
Pat Coyle
Edinburgh
Julie Ashworth
IoD Chairs from Geographical Areas
Essex
Christine Bhatt
Fife
Ian Collins
Glasgow
David Hoey
Gloucestershire
Christopher Smith
Hampshire and the Isle of Wight
Geraint Davies
Hereford and Worcester
Jo Hodgetts
Hertfordshire
Rahul Garella
Highlands & Islands
David Wilkinson
Kent
Jane Ollis
Lancashire
Stuart Thompson
Leicestershire
Stephen de Looze
Lincolnshire
Graham Headland
Liverpool
David Holdsworth
Manchester
Paul Battye
Norfolk
Howard Ingleson
Northamptonshire
Sarah Canning
Regions and Nations County branches
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IoD, Hong KongCEO: Carlye Tsui
IoD, Republic of IrelandCEO: Maura Quinn
IoD, ZimbabweExecutive Director: Edward Siwela
Affiliated bodiesOverseas branches
BelgiumMark Cunningham
BermudaRochelle Simons
CyprusEvdokimos Xenophontos
FranceRobert Thompson
MaltaJames Satariano
MonacoWilliam Easum
NetherlandsIIse Van Den Meijdenberg
North Wales
Helen Watson
Oxfordshire
Julia Iball
Somerset
Helen Lacey
Nottinghamshire & Derbyshire
Lynn Bleakley
South Wales
Managed through regional office
South Yorkshire
Keith Jackson
North Yorkshire
Jon Geldart
Suffolk
Graham Kill
Surrey
Robert May
Sussex
Dean Orgill
Tayside
Sonia Cottom
West Yorkshire
Dr Richard Smith
Guernsey
Linda Johnson
Isle of Man
Jennifer Houghton
Jersey
Chris Clark
Annual Report and Accounts 2017 | Governance
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IoD Premises | Annual Report and Accounts 2017
IoD Premises
London Pall Mall 116 Pall Mall, London, SW1Y 5ED T. 0207 839 1233
City New Broad Street House, 35 New Broad Street, London, EC2M 1NH
Enquiries: 0207 194 7500, Room Bookings: 0870 880 8484, Admin: Mei Sim Lai
East Midlands
Nottingham Newton Arkwright Building, Nottingham Trent University, Burton Street, Nottingham, NG1 4BU
Bookings: 0115 848 6190, Admin: Cari Grice, Director: Ron Lynch
North West
Manchester Lowry House 14th Floor 17 Marble Street Manchester M2 3AW
Enquiries: Lauren Mullan (0161 247 7634), Director: Claire Ebrey
Liverpool The Plaza, 100 Old Hall Street, Liverpool L3 9QJ
Bookings: 0161 247 7634, Admin: Lauren Mullan, Director: Claire Ebrey
Isle of Man The Claremont, 18-22 Loch Promenade, Douglas, Isle of Man, IM1 2LX
Bookings: 07624 355 160, Admin: Claire Veale, Director: Jennifer Houghton
West Midlands
Birmingham Library of Birmingham, Centenary Square, Birmingham, B1 2ND
Enquiries: Admin: Sue Hurrell (0121 643 7801), Director: Calum Nisbet
South West
Bristol The Innovation Centre at Bristol & Bath Science Park, Emersons Green, Bristol, BS16 7FR
Bookings: 0117 905 5000, Admin: Sarah Roberts & Debra Baker (0117 907 5050), Director: Simon Face
Bristol The Engine Shed, Station Approach, Temple Meads, Bristol, BS1 6QH
Bookings: 0117 903 1100, Director: Simon Face
Yorkshire Leeds Cloth Hall Court, Quebec Street, Leeds, LS1 2HA
Bookings: 0113 243 0152, Admin: Susanne Foxley, Director: Natalie Sykes
Northern Ireland
Belfast Riddel Hall, 185 Stranmillis Road, Belfast, BT9 5EE
Bookings: 0289 068 3224, Admin: Julie-Anne Clarke, Director: Kirsty McManus
Scotland Edinburgh 10 Charlotte Square, Edinburgh, EH2 4DR
Bookings: 0131 556 4270, Admin: Patricia Huth & Catriona Laing (0131 557 5488), Director: David Watt
Glasgow 200 St Vincent Street, Glasgow, G2 5RQ
Bookings: 0141 222 3934, Admin: Patricia Huth & Catriona Laing (0131 557 5488), Director: David Watt
Wales Cardiff Institute of Directors, Aberconway Building, Colum Drive, Cardiff, CF10 3EU
Bookings: 0292 038 9900, Admin: Debbie Trotman (0292 038 9990), Director: Robert Lloyd Griffiths
Bangor Bangor Business School, College Road, Bangor, LL57 2DG
Bookings: 0292 038 9900, Admin: Debbie Trotman (0292 038 9990), Director: Robert Lloyd Griffiths
Belgium Brussels De Warande, Zinnerstraat 1, 1000 Brussels, Belgium
Chair: Mark Cunningham (0032 2256 7530)
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Annual Report and Accounts 2017 | Blank Page
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