Welcome to my Board briefing for March 2019
At our first Board meeting on 25 February, we discussed the Board's priorities for the year, the outcomes of the banking royal commission, our financial position, the Transformer energy switching service and our technology strategy.
Welcoming a new Board member
Following the 2018 election process, we welcomed Ben Heuston to his first meeting as a director. Ben brings strong commercial, tech and not-for-profit experience and we look forward to his contribution to the Board.
This was the second meeting for Ben Naparstek, who was co-opted to the Board in October 2018. With his background in digital, editorial and publishing he will bring a valuable perspective to the Board's deliberations.
At the end of each year I spend time talking with each director and typically canvass their views on how the Board went, what their concerns and priorities are for the coming year, and if there are areas for myself, as Chair, to improve on, or pay close attention to. We discussed these further at the meeting and identified the following themes to focus on in our discussions with management during the year:
- The sustainability of the organisation.
- Ensuring we have the right targets and metrics.
- Our technology strategy and investment.
- Our value proposition and the underlying products and services we provide for members and supporters.
The Board will be joining management in a planning workshop in early April where we will explore these issues further.
We discussed the outcomes of the banking royal commission, which was a major priority for CHOICE through 2018. It's pleasing to see some of our long-term priorities reflected in the recommendations – including the establishment of a last-resort compensation scheme for people who lose money as a result of poor advice or misconduct, and tighter regulation of mortgage brokers.
As most of you know, management undertakes a quarterly reforecast of our financial performance and we reviewed the latest reforecast at the meeting. Consistent with the cycle of investment that we have been reporting to voting members over the past few years, we have budgeted for a deficit of $1.5m in 2018–19. This is allowing us to invest in technology upgrades and innovation around new business models to help consumers.
2018–19 is proving to be a challenging year for CHOICE membership. A flat market for household appliance purchases – a key driver of new membership – along with increased competition from commercial comparison sites, means that we have attracted fewer new members than expected. We have, however, been carefully managing expenses, as well as growing our CHOICE Recommended
Overall, this means that despite a challenging environment, we are on track to end the year close to our budgeted deficit.
Transformer energy switching service
Through 2018, we tested a new way of helping consumers find the best energy deal. The Transformer service was an ambitious innovation that allowed consumers to email in their energy bill, so we could analyse it and identify potential savings from switching to a better deal.
Like any innovation, Transformer required a period of investment while we were trying to see whether it was a viable long-term business model. In December, the Board decided that while we love the product and the positive impact it has had on the market, the risks involved in further investment were too great and it should be phased out.
The costs involved in phasing out Transformer have been incorporated into our reforecast for the year.
Transformer has been a sizeable project and investment for us, so at our February meeting we discussed what we learned through the process. We were particularly pleased with some of the achievements of Transformer, including:
- analysing more than 13,000 customer bills and helping over 2500 people find a better deal
- identifying over $1.8m in savings on their energy bills
- inspiring the NSW government to introduce its own free service similar to Transformer
While we are phasing this product out, as a Board and organisation, we learned a substantial amount about how to grow and scale a new business model, and we developed real capabilities in how the product was developed and brought to market. These learnings will be extremely valuable as we identify and test other ideas.
Underpinning our ability to develop new products and services, engage and advocate on important issues for consumers and, importantly, service and look after our members, lies a suite of technology platforms and digital tools. In late 2018, the CEO appointed Will Walker as our Chief Data and Technology Officer. This was a new position recognising that effective use of data and technology is critical to our sustainability.
Will presented his initial thinking on technology strategy to the Board. This will involve ensuring that CHOICE has modern, flexible platforms that support our existing activities and business models, as well as allowing us to innovate and collaborate with partners.
Our technology strategy will require upgrading or replacing some of the big platforms that help drive CHOICE – such as the software we use to manage content on choice.com.au and communicate with members, and the platforms that enable member engagement.
While this will involve investment, we have also identified a number of opportunities to reduce operating costs through smarter technology decisions.
I look forward to keeping you informed of our progress and thinking through 2019. As always, if you have any questions or suggestions, I would love to hear from you: email@example.com
Chair of the Board