Annual Report and Accounts 2017 - Institute of Directors

Annual Reportand Accounts 2017

2 www.iod.com

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.

2 www.iod.com

3www.iod.com

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

4 www.iod.com

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

5www.iod.com

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.”

6 www.iod.com

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

7www.iod.com

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

8 www.iod.com

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

9www.iod.com

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%

10 www.iod.com


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.

11www.iod.com


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

11www.iod.com

12 www.iod.com

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.


13www.iod.com


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

14 www.iod.com


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.

15www.iod.com


“ 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.

16 www.iod.com


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


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


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


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


21www.iod.com


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


23www.iod.com


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


East Midlands

25www.iod.com


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


Carlos Oliveira, Young Director of the Year Jane Montague, North West Family Business Director of the Year

27www.iod.com


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


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


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.


31www.iod.com


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


West Midlands

33www.iod.com

Dr Joanna BerryChair of IoD North East

Jon GeldartChair of Yorkshire and Humber


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


%

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)


(March 2018)

Member Departures

> Lady Barbara Judge CBE

(March 2018)

> Erica Ingham BA ACMA CGMA FIoD

(March 2018)

> Sir Ken Olisa OBE (March 2018)



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


Members

> Andrew Rinker JD MBA BSc CDir

FIoD FRICS Chartered FCSI FCIArb

New Members


(January 2018)

Member Departures

> Alyson Howard FCCA DCha CF

(June 2017)

> Erica Ingham BA ACMA CGMA FIoD

(March 2018)


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


New Members

> Kirsty Lloyd–Jukes MA (March 2018)


(March 2018)

Member Departures

> Lady Barbara Judge CBE

(March 2018)

> Sir Ken Olisa 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


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)


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.


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


55www.iod.com


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.


57www.iod.com


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


59www.iod.com


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.


61www.iod.com


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.


63www.iod.com


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


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




£’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


65www.iod.com


Notes At 31st December

2017

At 31st December

2016


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


Experience gain / (loss) arising on scheme liabilities

(25) 10


Changes in financial assumptions underlying the scheme liabilities – gain / (loss)

(210) (1,126)


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


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


67www.iod.com


Front of 116 Pall Mall

68 www.iod.com


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

69www.iod.com

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


70 www.iod.com

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)

71www.iod.com

Annual Report and Accounts 2017 | Blank Page

The Institute of Directors iod.com

Institute of DirectorsFor further information on this report or for a copy in large text format, please contact:

Training Events Networks Mentoring Research Influencing

The Institute Secretary’s Office020 7451 [email protected]

Documents

Annual Report and Accounts 2017 - Institute of Directors