Clearly if one arm of the organization derives nearly half of its
operating income from the other selling the output of its work, they are
not really separate. (investment income is not really operating - where
did that capital come from - was it from the float of SAIGlobal?)
Moreover, how is the profit split? It may be a bit like the large car
companies with their transfer pricing to offshore parents.
I agree with Tim - a more open process with declarations of interest
would be desirable. I guess I do worry about the fact that standards
development is being done by a private company. After all standards are
usually anathema to commercial business.
R
Tim Churches wrote:
Ian Cheong wrote:
At 1:44 pm +0800 19/3/06, Richard Hosking wrote:
Looking at the site it seems that SAIGlobal is an unashamedly
commercial business. I guess there is no reason why standards
development shouldnt be commercial (is there?).
I understand the standards writing organisation is separate from the
marketing organisation. See:
www.standards.org.au
Yes, a bit of detail is given here:
http://www.standards.org.au/cat.asp?catid=21
But how does this fit with the work done by committees? Do members get
paid?
No members get paid for committee work.
From the above URL:
<quote>
"Acknowledging our Committee Members
Our Technical Committee members are the lifeblood of standardization.
They willingly give their time and expertise to advance the principles
and practices of standardization. Their contribution to Australia's
well-being cannot be overestimated. Although they give their time
freely, it is estimated that their contribution is worth more than $30
million per year to the national interest.
Funding and Finance
Following the sale of its commercial businesses and the floating of SAI
Global in December 2003, Standards Australia's income is derived
principally from investments (66%) and royalties from SAI Global (16%).
The remainder represents fees for service from the Commonwealth
Government (13%) for activities in the national interest, in particular
international standardizing activities, and some miscellaneous activities."
</quote>
So committee members contribute $30m worth of time each year to create
standards documents which Standards Aust licenses to SAI Global to flog
to end users, and Standards Aust gets some royalties on those sales.
The sensible thing, if you are a committee member, would be to buy lots
of shares in SAI Global in the hope of getting some financial benefit
from all your hard committee work. But of course you don't need to be a
committee member to buy SAI Global shares.
Presumably Standards Australia owns the IP - why would I work on a
committee on anything but a commercial basis to increase the profits
of a private company?
It seems like Stds Aust does retain the IP and just licenses the
standards to SAI Global to flog on their behalf.
However, if only 16% of Standards Aust revenue is from royalties on
sales via SAI Global, one has to ask the question, why do they bother?
Better to trim their costs by 20% (less salubrious head office premises
for example) and just make their standards products freely available to
everyone?
Yeah, I already know the answer to that...
Although I find all these
selling-the-work-of-unpaid-committees-and-contributors arrangements a
bit strange, I think that the main areas for reform are the transparency
of the committee membership process (including diversification of
committee membership and mandatory and publicly-accessible declarations
of conflicts of interest), making committee mtgs virtual or more
accessible to members who can't attend in person or in business hours,
making minutes of all committee meetings publicly available, and
providing much better mechanisms for input and active contribution form
non-committee members from the earliest phases of standards development,
again with complete transparency of all contributions.
Given that we are talking about standards which will guide activity in a
sector of the economy which is of personal importance to everyone, and
which consumes about 10% of GDP, I think that the Australian people
deserve nothing less.
Tim C
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