How much does it cost the community if you avoid your obligations?

‘Income Tax is a levy NOT a ‘voluntary payment’, ‘expense’ or ‘donation’, it is a ‘social contribution and obligation’ imposed by the taxpayer elected government’. 

Governments use these funds for the benefit of the community like spending for the provision of essential services e.g. schools and hospitals etc.  Avoiding-Tax is simply ‘stealing’ from the community and it’s a ‘crime’.  All taxpayers effectively earn their assessable income either directly and or indirectly from each other through the goods and services we all provide to each other on a day-to-day basis.  Income Tax provides a means of giving back to community that provides our income.  Some people have managed to convince the community that they deserve more than others……fair enough, but this does not also give them the right to also avoid-tax.  If they earn more (that is a good thing), then they should pay more tax (also a good thing). 

The same rules must be applied fairly across every single taxpayer and everyone must pay their fair share of tax.

“For me the biggest question is whether or not we’re witnessing a fundamental shift from West to East, after centuries of Western global predominance,” says Niall Ferguson, Professor of Harvard Business School.  In 2004 Niall was named as one of the worlds hundred most influential people by Time Magazine.

Talking about the outlook for Australia in 2010, he says “Australia had a pretty good GFC, not least because it gained from the Chinese stimulus.  As that gives way to tightening, core elements of the Australia economy will find times getting tougher”.

Overview

BTO Group seeks to appoint four advisory board members.  The advisory board will function like a formal board but without the fiduciary duties of the main board.  The advisory board has no authority to act on behalf of BTO Group.  The role of the advisory board will be agreed and ratified by a charter leading up to the appointment of the advisory board members.  This charter will be ratified by the main board.

This is an ideal opportunity for an aspiring director that may not currently hold a directorship.  You are a member of AICD and preferably GAICD or FAICD.  You may be a principle or senior manager in a professional services firm or hold a senior executive position in the corporate world.  You are most likely seeking to get ‘real’ board experience, without any potential legal liability.  You will gain skills, knowledge and experience in a real-live environment and have a genuine desire to create something of value, right from the start.

The advisory board will be on a voluntary basis.  The period of the appointment will be from 1 May 2010 (or ASAP) to 30 June 2012.  The success of BTO Group will largely depend on how well the advisory board performs in setting the strategy and monitoring how well BTO Group executes those plans.  If BTO Group meets certain milestones it is expected that paid non-executive director or executive director positions will become available from 1 July 2012.  Equity participation will be considered and has been considered within the Constitution of the BTO Group Pty Ltd.

BTO Group seeks the following Advisory Board members.

1. Chairman (Marketing and Communication Expert)
2. Legal Expert
3. Accounting and Tax Expert
4. Human Resources Expert

The advisory board will meet in May 2010, June 2010 and July 2010, then on a quarterly basis.  An advisory board calendar will be agreed and made available.  Your time commitment will be 2-3 hours per meeting.  Between meetings there will a need to recommend and or review policies and procedures or provide input and feedback on key decisions that are required from time-to-time.

Purpose

To provide non-binding strategic advice to BTO Group.

Role and Responsibility

• Provide objective advice and contribute to strategic plans and value creation.
• Focus on big picture – strategic issues, industry and market trends.
• Give fresh insights and views on emerging or unfamiliar issues.
• Respond to ideas from management and the board.
• Plays devils advocate and supply high quality advice to support the main board’s decision making.
• Help with networking and promoting BTO Group.
• Participate in open, frank and free-flowing discussions.

Qualifications

Essential: Degree, Member relevant professional body, AICD 

Desirable: Post graduate qualification, GAICD or FAICD

Skills, Experience area of specialisation

Four Advisory Board Positions are available:

1. Chairman (Marketing and Communication Expert)
2. Legal Expert
3. Accounting and Tax Expert
4. Human Resources Expert

Organisation Overview

BTO is a professional services firm that provides world-class, back-office outsourcing and advisory services to small and medium-sized businesses (SMB’s). We focus on one simple goal: to make back-office functions great and more cost effective, so clients can focus on their customers. We work with the directors who understand people, process and systems provide the foundation for the success of any business.

If you or anyone you know might be interested please contact visit www.companydirectors.com.au

Starting next month…so stayed tuned!

If you’re a professional services firm in public practice, this ‘comprehensive series’ will provide some helpful hints and practical tools to help you run your practice better.

You sure about that…

The ASX defines corporate governance as “the framework of rules, relationships, systems and processes within and by which authority is exercised and controlled in corporations”. It encompasses the mechanisms by which companies, and those in control, are held to account. Corporate governance influences how the objectives are set and achieved, how risk is monitored and assessed, and how performance is optimised.

According to the latest BRW 1000 Survey, the net profit margin of listed companies is 11.4% and 1.8% for private companies. What would happen if SMB’s adopted the same Corporate Governance principles as BIG companies do?

Answer: perhaps net profit margins of SMB’s would increase on average from 1.8% to 11.4%.

The main reasons why IT implementations fail are:

1. Lack of corporate governance
2. Lack of strong leadership from the project sponsor
3. Not appointing the best people to the project
4. Not defining business benefits in line with overall strategy
5. Lack of understanding of the business requirements
6. Lack of complete implementation plan (start to finish – even in broad terms)
7. Lack of change management program
8. Solutions are too complex (develop solutions that mere mortals can follow)

Based on research conducted by MIT (Massachusetts Institute of Technology) over a 7 year period and 600 organisations.

1. When reviewing and approving the organisation’s strategic and business plans, is there satisfactory evidence that the board has applied a systematic approach to its evaluation?
2. Does the board have a set of unified policies to guide development of the strategic direction?
3. Are the board-level strategic processes being routinely defined, assessed and improved and does management have clear expectations about board participation?
4. Has the board, with management’s commitment, determined high-level strategically-oriented financial and non-financial KPI’s?
5. Does the board with management, periodically review and monitor the strategic direction to determine if it is on or off the strategic path and reallocate resources accordingly?
6. Does the board have the right knowledge about the situational analyses to add value to strategic options development and selection?
7. Has the right balance been struck between strategy formulations and providing for accountability in board proceedings?
8. Has the board challenged the levels of innovation, risk and experimentation to ensure that economic and social value is protected and enhanced for shareholders and stakeholders?
9. Is corporate renewal being assured through strategic fostering of core capabilities in existing and new business development?
10. Will the board know in advance of failure when to change strategic direction by examining its compatibility in plausible future scenarios?

Outsourcing isn’t always the right answer, in fact it may create more problems than it solves.

Reasons for not outsourcing include:

Your business personality does not suit outsourcing

1. You like to micromanage
2. Your impatient
3. You don’t like to commit
4. You have data privacy and confidentiality issues
5. You avoid confrontation
6. You think outsourcing will solve everything
7. Your not flexible
8. Your want someone else to take responsibility

The function is not suitable for outsourcing

1. Some functions are too complex to outsource
2. The return on investment is not adequate
3. You already have the resources
4. Perception problem with your customers and employees
5. You haven’t established a business case

Problem with the service provider

1. High fees
2. You don’t trust the service provider
3. The relationship is not mutually beneficial
4. You can’t agree on deliverables
5. You don’t make the right decision

Your customers and employees do not support the idea

1. Your customers demand you
2. You don’t have management buy-in
3. Doesn’t agreed with your culture

The board’s overall responsibility in strategy development:

1. Develop an appropriate strategic plan is necessary for an organization to achieve its objectives.
2. The board must be able to articulate strategy.
3. The board must understand test and endorse the strategic plan.
4. The board must be satisfied that the strategic plan is achievable.
5. The board must devote adequate time to strategic issues.
6. The board is responsible for setting the tone and standards of the organization.
7. The board sets measures (KPI’s/BSC) to measure against objectives.
8. The board must monitor the implementation and performance of strategic objectives.

(Australian Institute of Company Directors, 2005)

With an increased focus performance, reducing costs and getting back to core business is at the top of the agenda, back office outsourcing become prime candidates for outsourcing. Outsourcing brings economies of scale, best practices, leading edge technology and expertise.

Reasons for outsourcing include:

Improve your image

1. You need to appear bigger or more competent
2. You need more space
3. Your customers are demanding more from you

Financial benefits:

1. You need to conserve cash flow and capital
2. You need additional sources of revenue
3. You want to reduce your operating costs
4. You want to reduce your administration costs

Manage and govern better:

1. You need to focus more ‘on’ your business than ‘in’ your business
2. You need something done quickly
3. You want to avoid headaches
4. You need to remove bottlenecks and stumbling blocks

Access to experts:

1. You don’t have in-house expertise
2. You get better tools
3. You can share resources and reduce risk