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Risk Management Policy : Schedule A

 

Approving Authority:

Council

Establishment Date:

9 June 2005

Date Last Amendment:

January 2011

Nature of Amendment:

Consequential amendments arising from a restructure of Central Administration/VC's office and the creation of new senior executive positions replacing the EDA and Registrar

Date Last Reviewed:

 

Responsible Officer:

Vice-President (Strategic Finance and Resources)

 

 

Procedures for Planning Significant New Commercial Initiatives



1 Purpose

This document:

(i) outlines the protocol for identifying commercial and significant initiatives. The ultimate purpose is to establish an efficient pathway, which ensures that major proposals with higher risk implications are directed to Council, and that other proposals are attended to within existing University policy, risk management and decision-making arrangements.

(ii) incorporates procedures for developing proposals for significant new commercial initiatives.

2 Review Protocol

When is an initiative commercial, and what is a significant investment of University assets?

The following review protocol:

  • provides guidelines for determining whether initiatives are commercial ventures or proposals to invest significant University assets, and therefore to be presented to Council for approval; and
  • allows for certain types of initiatives to be approved in accordance with existing Council-approved policies and plans, as nominated.


2.1 Step 1

Is the initiative a significant commercial venture or initiative?

Ventures or initiatives which are:

  • commercial (i.e. related to business, as established by Criterion A); and
  • significant (i.e. important, notable, material and of consequence, as established by Criterion B) should prima facie be referred to Council for approval.

Criterion A:

Where capital is to be laid out on any work and there is a risk of profit or loss, it is a commercial venture or initiative.

Criterion B:

The commercial venture or initiative is significant if any one of the following apply.

(i) regarding the University’s reputation
If, in the Vice-Chancellor’s assessment, the potential risk to the University’s reputation is significant

(ii) regarding University assets (other than cash)
If the University is required to make available staff and/or equipment and/or infrastructure and/or intellectual property, to a notional value of greater than $250,000 per annum

(iii) regarding cash investment
If the University is required to make a commitment of greater than $250,000 in total, across the expected duration of the commercial venture or initiative

(iv) regarding potential liability
If the University is potentially liable to underwrite an initiative at a cost greater than $250,000

(v) regarding ownership
If the University ownership interest is 20% or more [1])

(vi) regarding annual revenue
If the annual net revenue is expected to exceed $250,000 per annum

(vii) regarding offshore initiatives
If the offshore initiative is not within the scope of the Policy on the Development of Offshore Programs

(viii) regarding other imperatives
If, in the Vice-Chancellor’s judgement there are important internal or external factors which should be brought to the attention of Council.


[1]where ownership is 20% or more, the entity is deemed to be an "associate" according to Australian accounting standards


2.2 Step 2

Is the initiative within the scope of an existing requirement for Council approval or an existing Council-approved policy or plan that provides appropriate assessment and decision-making processes?

If, in the judgement of the Vice-Chancellor, a Deputy or Pro Vice-Chancellor, a Vice-President, or an Executive Dean, the initiative falls within the scope of an existing Council-approved policy or plan, the proposal will be developed and approved in accordance with the relevant policy and procedures. "Nominated policies and plans " include the following:
  • Policy on Course and Topic Development, Management and Approval
  • Policy on the Development of Offshore Programs
  • Policy on Centres
  • Policy on Controlled Entities
  • Policy on Delegations of Authority to Enter into Contracts
  • Intellectual Property Policy
  • Policy on Investments
  • Policy on Financial Delegations
  • Flinders Strategic Priorities and Future Directions MkIII 2006-2010


2.3 Step 3

Is the initiative likely to recur regularly? Does it warrant the development of a Council approved policy that establishes requirements for assessment and decision-making, including delegated authority?


3. Approval process

3.1 Proposals which are deemed to meet the criteria for "significant" and "commercial", as set out in Step 1 of the Review Protocol, will be referred to Council for approval in accordance with the following procedure:


3.1.1 The Vice-Chancellor will receive the proposal and taking advice as required, will consider whether a suitable case has been made.

3.1.2 On deciding that a suitable case has been made, the Vice-Chancellor will refer the proposal to Resources Committee for endorsement and to Council for approval, giving the reasons for the University’s establishment or support of the venture, its primary areas of activity, and a risk assessment.

3.2 If, in the judgement of the Vice-Chancellor, a Deputy or Pro Vice-Chancellor, a Vice-President, or an Executive Dean, the initiative falls within the scope of the Council-approved policies and plans specified in Step 2 of the Review Protocol, decision-making will continue to occur as required by the relevant policy.

3.3 The criteria in Step 1 will be reviewed after a 12 month period to determine their effectiveness with regard to identifying significant commercial ventures.

3.4 Council approval may be achieved either through the Executive Committee or through a scheduled meeting of Council, subject to further advice from the Working Party on Commercial Ventures, having regard to the type of initiative, risk profile, stage of development and external time lines.

4. Procedures for Developing Proposals for Significant New Commercial Initiatives

4.1 Proposals for initiatives which are deemed to meet the criteria for "significant" and "commercial", as set out in Step 1 of the Review Protocol and which do not fall within the scope of a Council-approved policy and plan specified in Step 2 of the Review Protocol, will be developed in accordance with the Procedures for Developing Proposals for Significant New Commercial Initiatives at Attachment 1.


Attachment 1


PROCEDURES FOR DEVELOPING PROPOSALS FOR SIGNIFICANT NEW COMMERCIAL INITIATIVES (as identified in accordance with Step 1, Criterion A and B of the Review Protocol at Schedule A of the Risk Management Policy)


The flow chart (Attachment 2) illustrates the development and approval process for significant new commercial initiatives.


1. Phase 1: Initial Concept Proposal

1.1 Proponents of any significant new commercial initiative are required to prepare an initial concept proposal that will include:


1.1.1 a brief outline of what the proposal is about;
1.1.2 benefits to Flinders;
1.1.3 how the proposal fits in with the University's strategic directions, goals and objectives;
1.1.4 significant areas of risk associated with the proposal and an indication of how they will be managed; and
1.1.5 key proponents of the proposal and key Flinders staff involved.


1.2 The initial concept proposal will be referred to the appropriate Deputy Vice-Chancellor, Executive Dean or Cost Centre Head for consideration, prior to moving to the second phase of proposal development, a detailed consideration of the issues and associated risks.


2. Phase 2: Detailed consideration of issues and risk assessment

2.1 The initial concept proposal, if supported, will undergo further detailed development to identify and consider all relevant issues.

2.2 General advice and guidance about the development of proposals may be sought from the Faculty General Manager and the Vice-President (Strategic Finance and Resources). Frequently Asked Questions to be used as a guide to development of proposals are available on the website for this policy.

2.3 For each relevant issue, any significant risk considerations will be identified and given a risk probability rating (Low, Medium, High), with specific advice on how the risks will be managed.

2.4 The more detailed proposal, incorporating consideration of the key issues and risk assessment will be referred to the appropriate Deputy or Pro Vice-Chancellor, Vice-President, or Executive Dean for consideration.

2.5 The proposal, if supported, will be referred to the Vice-President (Strategic Finance and Resources) and/ or the appropriate Deputy Vice-Chancellor for consultation and advice as to whether the proposal will require development of an initial business plan.

3. Phase 3: Business plan


3.1 The extent of detailed analysis that is required in the business plan will depend on the nature of the proposal and the outcome of the phase two consideration of issues and risk assessment.

3.2 The business plan will be referred to the appropriate Deputy or Pro Vice-Chancellor, Vice-President, or Executive Dean for consideration and endorsement, prior to being submitted to the Vice-Chancellor, who will take advice as required.