session 7 Board

Chair / Presenter: John Baistow & Helen Clarke •  Board renewal •  MD informal review

assessing project practicality & risk

1.  Shared value – creating value with values

2.  Investor engagement influences investment section

3.  Identifying and managing risk

4.  Collaboration is critical

5.  Measuring impact

1.  Cooperatives make a significant contribution to socio-economic development, particularly on poverty reduction, employment generation and social integration

2.  Cooperatives offer a diverse, values-based approach to business

which can provide a sustainable source of revenue for communities and individuals

3.  Cooperatives play an important role amongst a diverse corporate ecology, strengthening communities socially, economically and environmentally

We have a powerful and positive story to tell when it comes to financing community development

a global movement of cooperation

some impressive coop numbers •  1 billion owners of cooperatives globally

•  Help secure the livelihood of 3 billion people

•  Employ 20% more people than all the multinationals

•  The worlds top 300 cooperatives turn over $1.6 trillion

equivalent to the GDP of Canada

•  Three times as many cooperative owners as investors in the world

•  Cooperative banks did not contribute to the GFC: market share;

France 45%, Netherlands 40%, Germany 25% and Italy 20% 

•  1600 Australian cooperatives in finance, insurance, agriculture and

farming, health, retail, housing, manufacturing and arts sectors

what we knew and now know

The key to making a profit and positive impact is actually to make a positive impact in such a way that generates profit.

However, a new and positive post GFC trend is seeing the emergence of businesses that exist to create profits by

creating social and environmental benefit.

a new narrative – rethinking capitalism, the creation of shared value

Commonplace? No

Obvious? Yes

a new narrative – rethinking capitalism, the creation of shared value

“Not all profit is equal. Profits involving a social purpose

represent a higher form of capitalism, one that creates a

positive cycle of company and community prosperity”

Michael Porter & Mark Kramer

Harvard Business Review January 2011

Shared value, transformative business thinking. Enhancing shareholder value whilst simultaneously advancing the economic, social, environmental & governance conditions in the communities where we operate; not in a way that is marginal to our business but in a way that is central to everything we do as a customer owned responsible bank

social interests,

expectations, needs & values

governance, risk, compliance

interests, expectations,

needs & Values

environmental interests, expectations, needs & Values

economic interests, expectations, needs & values

Reconceiving products and

markets

Looking at money

through a different lens

+ -

purpose

Reconceiving products and

markets

Looking at money

through a different lens

1.  Renewable energy

2.  The welfare of vulnerable people in the community

3.  Quality of education

4.  Climate change

5.  Housing affordability

6.  Sustainable housing design

7.  Loss of biodiversity

Issues currently most important to our customers who own the bank

Shared value, transformative business thinking. Enhancing shareholder value whilst simultaneously advancing the economic, social, environmental & governance conditions in the communities where we operate; not in a way that is marginal to our business but in a way that is central to everything we do as a customer owned responsible bank

Reconceiving products and

markets

Looking at money

through a different lens

1.  ADI safety and security

2.  Highly regulated APRA and ASIC environment

3.  Deposit guarantee

4.  Established marketplace

5.  Guaranteed return

6.  Fee free

7.  Accessible to non sophisticated investors

Responsible cash as an asset class

Shared value, transformative business thinking. Enhancing shareholder value whilst simultaneously advancing the economic, social, environmental & governance conditions in the communities where we operate; not in a way that is marginal to our business but in a way that is central to everything we do as a customer owned responsible bank

Reconceiving products and

markets

Looking at money

through a different lens

1.  Credit risk

2.  Reputational risk

3.  Regulatory risk

4.  Alignment with the bank’s purpose

5.  Alignment with investor values, interests, needs and expectations

Identifying and managing risks

Shared value, transformative business thinking. Enhancing shareholder value whilst simultaneously advancing the economic, social, environmental & governance conditions in the communities where we operate; not in a way that is marginal to our business but in a way that is central to everything we do as a customer owned responsible bank

Reconceiving products and

markets

Looking at money

through a different lens

•  It’s all about impact

•  Non financial measures of performance

•  Financial reporting

•  Sustainability reporting

•  Integrated corporate reporting

Measurement Social and environmental return on investment

Shared value, transformative business thinking. Enhancing shareholder value whilst simultaneously advancing the economic, social, environmental & governance conditions in the communities where we operate; not in a way that is marginal to our business but in a way that is central to everything we do as a customer owned responsible bank