GovernancePart IAgendaItem 2.1 – Partnership Opportunity with Superlarge Supermarkets          Healy Health Fund (HHF)intends to partner with Superlarge supermarkets in Australia to use theirByeByes program as a source of new clients. Considering the report on thisproject as the CEO presented it, it is highly significant to the future of theorganization.

First, the main significance of the project lies in the fact thatthe Byebyes program has approximately four million customers in Australia hencea potential for four million new customers for HHF. Even though some of theByebyes customers may have already subscribed to HHF, more than 75% are stillpotential customers. Secondly, the project will ultimately be beneficial toHHF. HHF requires 2000 new customers to make a profit from the deal in the faceof more than three million new customers. The $200 offer and the promise of anadditional $100 offer for the superlarge supermarket promise to win HHF morethan 2000 new customers.           One inquiry that I would make in the meeting on this issueis if the superlarge supermarkets would avail their strategic plans for winningcustomers to HHF.

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I would recommend that each superlarge supermarket thataccepts the deal to submit a detailed strategic plan which they would use tolure the customers into signing for HHF. I would also propose that they offerthe $200 value to their customers in various ways like discounts and freevouchers. Finally, the supermarkets should advertise HHF along with theiradvertisements for the ByeByes program.           Implementation of these recommendations would help not onlyHHF but also the supermarkets. By intensifying their advertisement campaigns,they would get more customers for the ByeByes program while HHF would get morepotential customers. Further, offering the $200 to the customer in a variety ofways would increase the attractiveness of the deal to more customers henceincreasing the number of people HHF would sign up as a result. AgendaItem 2.

2 – Potential Member Services Center in Sydney          The CEO of HHF, Mr. Plummer suggests that the organizationshould set up a member services center in Sydney similar to the one in Sydney.Considering the success of the center in Brisbane, this proposal is highlysignificant to the future success of the organization. Since HHF has members inmany parts of Australia, it is important for them to set up as many centers aspossible to enhance member access to the centers. Furthermore, the centers helpnot only to improve customer satisfaction and retention but also to help theorganization in signing up more members.

In addition, some of the services thatHHF provides at the center such as a gym and access to medical staff can help theorganization to raise more funds.           Even though the CEO does mention cost-effectiveness in hisreport, I would want him to show the exact balance sheet of the Brisbane centerfor us to consider the effectiveness of this idea. Also, I would require him totable the exact cost of the proposed center in Sydney.           Having confirmed the cost-effectiveness of the proposedservices center, I would suggest that HHF also incorporate periodic screeningservices for various diseases for the members at the centers. Apart from dentaland physiotherapeutic services, members should also access regular screeningservices for diseases like breast cancer, cervical cancer, and prostate cancer.Regular screening of members will ensure early diagnosis of these fatal andexpensive diseases hence a decreased cost of treatment. For instance, yearly screeningof breast cancer for women aged above 50 years will enhance early diagnosishence a lesser treatment cost.

Furthermore, members are likely to support andlike the screening services hence ensuring a higher rate of membersatisfaction. Screening of non-members at a fee on the designated days can makeit even more profitable for the organization. AgendaItem 2.3 – Risk Committee Report          The report by the riskcommittee is highly significant and pivotal to the future of the organizationand is a key determiner of the actions that the organizations will take in thenear future. The most significant aspect of the report its identification ofcompetition and customer lapse as key risks to the organization. The increasedrisk of cybercrime is another key emerging issue that appears in the report.

The significance of this issue is even higher to HHF as they have suffered acyber-attack in recent times. Further, the possibility of legislative changesthat can impact negatively on the organization’s is another significant issuethat arises in the report; the fact that the mitigation measures that thecommittee suggest seem unsatisfactory make it even more significant. Finally,the issue of improper claims is an important emergent issue that appears in thereport and has significantly affected health insurers in recent times.           Although the report seems complete, I would still inquirewhy the committee did not consider misappropriation of funds by the topexecutive as an important risk which required mitigation. The fact that HHF haspreviously been in the limelight for the misappropriation of funds should makeit a key risk to the organization.

In mitigating the risks perfectly, I wouldpropose that the organization contracts internal auditors who would ensure paymentof only the right claims and prevention of misappropriation of funds. Further,I would propose that the organization introduces new services like thescreening services for the members.           Having internal auditors will ensure that the organizationdoes not lose money through fraudulent claims or misappropriation of funds.Even in the face of rising healthcare costs, experienced auditors will knowwhat is fraudulent and what is not.

Introducing screening services wouldenhance the attractiveness of HHF to members hence its competitiveness. Apartfrom the advantage of reducing the number of claims, provision of such serviceswould enhance member retention and would encourage new members to join. AgendaItem 2.4 – Remuneration of Directors          The finance and auditcommittee of the organization has suggested an increase in the remuneration ofthe directors and the allowances given to the non-executive members of thevarious committees.

The main issue arising is the size of the increments thatthe committee proposes. The significance of this matter lies in the fact thatits implementation will significantly increase the costs of running theorganization. I believe that even though each director would be happy with theincreased package, they will not be happy with the increase in the recurrentcosts of the organization.           One thing I would wish to know before deciding whether toratify the proposal or not is the effect of these increased remunerations onthe organization’s balance sheet. In other words, I would like to see exactlyhow the increased cost of operation compares with the increase in the incomethat the organization has accrued over the past one year. I would propose thatthe board redirects part of the finances for increasing members’ remunerationto other projects that can enhance the growth of the organization.

          Since the organization works on a not-for-profit (NFP)basis, it is important for directors to carry the same mindset. Thus, insteadof jumping at an opportunity of increased remuneration for themselves, thedirectors should look at alternative ideas that would look to improve the dealfor everyone else. In this case, redirecting part of the extra funds to newprojects which members of the board may propose like setting up regularscreening services for members would mutually benefit all the members. Anythingthat benefits and enhances the members’ satisfaction benefits the entireorganization and, thus, the board members too.

Furthermore, using the funds onprojects that focus on the members can potentially enhance the competitivenessof the organization. AgendaItem 3.1 – CEO’s Report          The CEO’s report hasseveral highly significant emerging issues. First, the CEO’s is clear on theneed for the organization to focus on customers in its undertakings.

Theupcoming strategic meeting makes this issues even more significant; as a board,we should look for future strategies which focus on the customer. Second, theActiveByte program is an important arising issue. Among the customer complaintsthat the CEO earlier reported were questions on the role of ActiveByte and whyall aged members of HHF are required to use it. Third, our decreasing number offull-time employees and the stagnation of our market share of health funds areworrisome. A decreasing number of full-time employees predisposes us to highemployee turnover costs hence increasing our cost of operation. Furthermore,the stagnation of our market share of health funds reveals that we are notgrowing.           On the CEO’s report, I would inquire from him what theexecutive has done to counter the effect of rising healthcare costs which seemsto be the most important driver of customer lapse. I would propose that theboard moves with speed to plan for greater member and general public educationon ActiveByte.

          Since ActiveByte has been a source of controversy as it causesdissatisfaction among some members and high satisfaction among other members,enhanced member and non-member education on this program will enhance theoutcomes. Educating members will encourage them to see the sense of signing upfor the program hence reducing the claims that HHF has to pay. Since theprogram is also good for enhancement of the general health of the elderly,educating non-members about this program can greatly increase the number ofpeople who sign up for it hence creating a source of extra revenue for theorganization. Furthermore, the non-members who sign-up for the program mighteventually be interested in subscribing to HHF. AgendaItem 3.2 – CFO’s Report          The organization’sfinancial report for the last six months reveals some significant findings.Among the key emerging issues is that the organization did not achieve alltheir key performance indicators as they had projected in the previous year.

The organization registered much lower profits compared to what they hadprojected in the budget. The costs of running the organization were alsosignificantly higher than what the budget had predicted. The CFO’s report thusshows that even though HHF is trying, they still have some way to achieve theirtargets and they, thus, need to do more to improve. On the positive side, theCFO’s report confirms the importance of services center to the organization.           In the meeting, I would inquire from the executive thesteps that they have taken to reduce the costs of operation and the request processingcosts.

Cutting on the costs of operation is one way in which HHF can maximizetheir profits and services to customers. I would thus suggest that the boarddeliberates on possible ways of reducing the cost of operation. One way wouldbe to decline the offer to increase their remuneration as it is. The other wayis to reduce the number of claims by increasing the members’ access to dentaland physiotherapeutic services and ActiveByte.           Reducing the number of claims will go a long way inreducing the amount of money that the organization spends.

HHF can enhance themembers’ access to physiotherapeutic and dental services by opening moreservice centers in as many parts of Australia as possible. Further, theActiveByte program can potentially reduce the number of claims by cardiacpatients. Declining to increase the remuneration of the board members willdirectly decrease the recurrent costs that the organization has to incur.Implementation of all these strategies will enhance the ability of HHF to attainits key performance indicators at the end of the next financial year. Part IIAppointmentof a New Director          The current board ofHHF is an almost perfect board. The board has four very experienced memberswith expertise in various fields which is good for the organization.

Furthermore,the board has a good gender balance as two of the five members are female. Thechair, Jane Forsyth, who is a BA holder in marketing and communicationsprovides a lot of expertise in this area. She also has experience withdirecting NFP organizations as she is a member of the board for three otherorganizations. Peter Dowling, a psychologist by profession, has plenty ofexpertise in human resource issues and management as he owns his own company. Further,the fact that the organization can contract his company confers an extraadvantage for the organization. Julian Jones, who owns various real estateproperties, brings the wealth of experience in management and confers an extraadvantage of having information on the presence of office spaces or buildingsthat the organization can use. Robert Arnett brings loads of experience in insurancefirms and experience as a member of the board of NFP organizations. Four out offive members of the current board are well above 60 years of age and haverelatively high education levels hence enhancing the strength of the board.

          Despite its seemingly obvious strength on face value, thecurrent board has some weaknesses. First, the board has relatively few memberscompared to the number of clients that HHF target to satisfy in the nearfuture. Moreover, since all board members are also members of HHF, it is hardfor the board to consider its decisions in the view of a non-member.Furthermore, the board has a key deficiency of expertise in finance. The boardhas members with expertise in marketing and insurance but none with expertisein finance. This deficiency could explain the previous incident of financialmisappropriation at the organization.

Additionally, although having experiencedmembers in a company’s board is desirable, inclusivity is more desirable. Inother words, the current composition of the board excludes youth. For thisreasons, I recommend that the board either get one new member who is young buthas expertise in finance or gets two new members, one to represent theinterests of the youth and the other to offer expertise in finance. It would bepreferable if the new member or one of the two new members is a not a member ofHHF.           SinceHHF is not a public limited company, the current board members can effectivelyappoint a new board member.

The process of selecting a new director shouldstart at least 35 days before an annual general meeting. Since the date of theannual general meeting for HHF is not specified, the process can start anytimefor this organization. Selected member has to be above 18 years of age and tohave good fame and character as the Australian law requires.

Further, since HHFis Australian Prudential Regulation Authority-regulated, the current boardmembers will have to assess the fitness and propriety of a proposed memberbefore they can select them. The internal regulations of HHF will further guidethis step of the selection process. Even though the Australian law defines theprocedures for assessment of fitness and propriety of potential board members,different organizations have their additional definitions for theseassessments.           If the in the assessments the current board members get anideal person who can potentially fill in all or some of the deficienciespresent in the current board, the board will require the candidate to consentto their appointment to the position. The new board member sends in theirconsent in writing – the consent contains the new members’ personal detailswhich the board submits to the Australian Securities and Investments Commission(ASIC) within 28 days of their appointment.

 After that, the board can then send theapplicant a letter of appointment. The letter of appointment provides a widerange of information as various acts of the Australian constitution specify. Theletter specifies the duration of appointment which varies from one to threeyears depending on the regulations of the organization. The letter alsospecifies the expectations and duties of the board in appointment of new boardmembers; the standard time commitments that the organization will require ofthe new board member; induction process and any requirements for furthereducation; special duties; expectations to participate in various boardcommittees; information of remuneration; how the board solves conflicts ofinterest; confidentiality; and insurance arrangements.

The board usually sendsa copy of the organization’s constitution as an attachment to this letter. Part IIAdditionalGovernance Issues          The most importantadditional governance issues which the board should consider in theirdeliberations are: ·       The threatof bad comments on the organization’s website. Even though there are also manygood comments and a general increase in customer satisfaction on the website,the presence of these bad comments can have devastating effects as they candiscourage some individuals from subscribing to HHF or convince those who arealready members of HHF but have not made a claim to quit the organization.

Onthis issue, the board should ratify the CEO’s suggestion of pulling down thecomments box. Rather the organization should go for more physical servicecenters where customers can register their complaints. ·       The threatof cybersecurity and hacking. The organization has experienced a hackingepisode in the recent past. Cybercrime has the potential to interfere with theactivities of an organization adversely, to give an organization a badreputation, and ultimately to reduce their competitiveness in the market.

Toprevent this, it is important for the board to consider contracting specialistsfor advice on cybersecurity.·       The the laststrategic planning meeting. The difficult landscape in the health insurancesector in Australia calls for frequent strategic plan meetings to enhancecompetitiveness. Although the organization has achieved its key performanceindicators in recent times, frequent strategic plan meetings are stillimportant. I recommend that the board sets a regular period of three yearsbetween strategic plan meetings. ·       Thepotential negative effects of conflict of interest as many directors either door intend to do business with the organization. Even though it can beadvantageous for board members to do business with an organization as it mayafford the organization greater discounts, it can be a disadvantage too as someboard members may look to exploit the organization, especially for an NFP firmlike HHF.

I propose for an amendment to the organization’s constitution thatwill bar board members from engaging in business with the group. ·       The threatof changing government policy impacting negatively on the activities of theorganization. Changes in government policy are likely to interfere with theorganization’s utilization of incentives to lure members. Seeking for legaladvice in the process of policy-making can help the organization to overcomethis. In theprocess of mentioning my proposals, I intend to utilize my ability to givein-depth and convincing explanations to influence my fellow directors intoaccepting my proposals.

For each proposal I make, I will look to enumerate andexplain the pros and cons and prove that it can be advantageous and useful forthe organization hence leaving the other directors with little option but toaccept it. I will also look to counter their counter-arguments assertively andpolitely to avoid raising emotion while at the same time convincing them thattheir counter-argument is not perfect for the organization.