What Makes the Most Admired Companies Great

1. What Makes the Most Admired Companies Great Board Governance and Effective Human Capital Management

2. Welcome Richard Hardwick, Managing Director, Hay Group (Pacific)

3. WELCOME • The World’s Most Admired 2007 • Carlo Cataldo, Head of Risk, GE Money • Working for the World’s Most Admired • Board governance and Human Capital: a key differentiator • Cheryl Batagol, Chair, Melbourne Water • The journey of a local board • Questions & Comments • 9.15am close

4. The World’s Most Admired Companies 2007 Denise Girdlestone, Senior Consultant, Hay Group

5. Fortune Survey of Most Admired Companies What is it? • Study of corporate reputations • Candidates: Fortune 1,000 and Global 500 companies • Companies rated both overall (All Stars) and relative to their industry peers (Industry)

6. Fortune Survey of Most Admired Companies Attributes: • Ability to attract and retain talented people • Quality of management • Quality of products or services • Innovativeness • Long-term investment value • Financial soundness • Wise use of corporate assets • Social responsibility to the community and the environment 9. Effectiveness in conducting business globally

7. Why Study the Most Admired Companies? Most Admired Companies outperform industry peers and the market as a whole, on total shareholder returns Most Admired S&P 500 • 19.6% 7.1%

8. “All Stars” for 2007 World’s Most Admired • General Electric* • Toyota Motor* • Procter & Gamble* • Johnson & Johnson* • Apple* • Berkshire Hathaway* • FedEx* • Microsoft* • BMW • PepsiCo * Company also included in Top 10 list in 2006.

9. A Different Perspective on the All Stars Top Per European Raters Top Non-U.S. Companies • Toyota Motor • BMW • Singapore Airlines • Nokia • Honda Motor • Nestlé • Toyota Industries • Tesco • Samsung Electronics • BP

10. The 2007 WMAC Industry Honor Roll The Best of... Computers Entertainment Food and Drug Stores Household and Personal Products Motor Vehicles Petroleum Refining IBM Walt Disney Tesco Procter & Gamble BMW Exxon Mobil

11. Working for the World’s Most Admired Company: Carlo Cataldo, Head of Risk, GE Money

12. The increasing role of Boards in Human Capital governance Paul Meijer, Consultant, Hay Group

13. And then there was…..

14. Life on the Board has changed • Sarbanes-Oxley-Higgs-ASX-CLERP9 • Liability of the Chair (Greaves Precedent) • Committees • Time

15. So what do the Board of the World’s Most Admired do? They are more directly focused on human capital issues

16. Peer Group Most Admired So what do the Board of the World’s Most Admired do? They are more directly focused on human capital issues Human capital strategy has been reviewed and approved by the board. 82 69 0 10 20 30 40 50 60 70 80 90 100 % Agree

17. Peer Group Most Admired So what do the Board of the World’s Most Admired do? They are more directly focused on human capital issues Human capital strategy has been reviewed and approved by the board. 82 69 Board is regularly given information and metrics related to human capital management 82 67 0 10 20 30 40 50 60 70 80 90 100 % Agree

18. Peer Group Most Admired 82 69 82 67 77 65 0 10 20 30 40 50 60 70 80 90 100 So what do the Board of the World’s Most Admired do? They are more directly focused on human capital issues Human capital strategy has been reviewed and approved by the board Board is regularly given information and metrics related to human capital management The CEO and management regularly draw on expertise of the board on human capital issues. % Agree

19. Boards of the World’s Most Admired evaluate their CEOs differently They look beyond strategy and finance

20. Peer Group Most Admired Boards of the World’s Most Admired evaluate their CEOs differently They look beyond strategy and finance In evaluating CEO performance, board focuses on strategy implementation. 97 92 In evaluating CEO performance, board focuses on financial success. 95 91 0 10 20 30 40 50 60 70 80 90 100 % Agree

21. Peer Group Most Admired 97 92 95 91 81 66 0 10 20 30 40 50 60 70 80 90 100 Boards of the World’s Most Admired evaluate their CEOs differently They look beyond strategy and finance In evaluating CEO performance, board focuses on strategy implementation. In evaluating CEO performance, board focuses on financial success. In evaluating CEO performance, board focuses on success in developing human capital. % Agree

22. WMA Boards manage CEO and Executive succession differently By being better prepared for the loss of top executives

23. Peer Group Most Admired WMA Boards manage CEO and Executive succession differently By being better prepared for the loss of top executives We have a well defined plan to cover the emergency loss of the CEO. 91 65 0 10 20 30 40 50 60 70 80 90 100 % Agree

24. Peer Group Most Admired WMA Boards manage CEO and Executive succession differently By being better prepared for the loss of top executives We have a well defined plan to cover the emergency loss of the CEO. We have a well defined plan to cover the emergency loss of other top corporate executives. % Agree

25. So, a small checklist Are you up to speed with the status of Human Capital in your organisation? Is your CEO’s performance measured in regards to leadership development? Do you know who your next CEO will be? Do you have an emergency succession plan?

26. A Local Perspective: The Journey of Melbourne Water Cheryl Batagol, Chair, Melbourne Water

27. Questions & Comments

28. Thank you