The Institute of Directors

Annual Report
and Accounts 2007
F I V E Y E A R S U M M A RY 2003 2004 2005 2006 2007

No. of members at Year End 53,473 53,268 52,780 52,790 52,427

Surplus/Deficit before Tax (£k) 647 1,350 1,824 2,147 2,159
Gross Income (£k) 30,145 31,755 33,268 34,402 35,617
Net Assets (£k) 1,817 2,194 3,605 5,834 7,714
Fixed Asset Investment (£k) 1,236 1,822 2,155 1,669 1,495
Investments & Cash Balances (£k) 8,201 9,285 10,173 11,762 14,225
Net Assets as % of Gross Income 6.0% 6.9% 10.8% 17.0% 21.7%
Fixed Asset Investment as % of
Gross Income 4.1% 5.7% 6.5% 4.9% 4.2%
Investments & Cash Balances as
% of Gross Income 27.2% 29.2% 30.6% 34.2% 39.9%
CHAIRMAN’S REVIEW
I am delighted about the progress that we have made in
2007. The Director General’s report goes into the detail, but
for me the highlights are:
A year of financial success and security
with an increased cash balance at the
year end;
A healthy membership level overall, and
a focus on relevant benefits that has
been appreciated by the membership.
These initiatives have been strong at
both regional and national levels;
Further improvement of our profile in
the media and of our influencing activity
with Government, with the Opposition
and in Europe;
Continued emphasis on professional
development as a core activity and
further growth of the Chartered Director
membership;
Widening of our international presence
in a cost-effective way building, for
example, strong links with Russia through
the Independent Directors Association.
In our annual strategic review in October
2007 we reiterated the importance of the big
themes that we had identified. These are:
1. To expand our professional
development activities, with special
reference to the flagship Chartered
Director programme. Recognising the
opportunity of being the leader in
corporate governance both at home
and abroad, we have a number of
programmes and activities to help us
deliver this objective;
2. To grow our international activities to
Dr Neville Bain
CHAIRMAN
support our members with knowledge
and access to developing countries
such as China, India and Russia. This
will include expanding our network and
supporting our members with knowledge
and information in key markets;
3. To extend our reputation, influence and
representation, ensuring that our
members have a strong voice with
which to lobby the Government, the
Opposition and in Europe;
4. To utilise electronic communication and
the full benefits of the internet more
effectively in providing service to our
members;
5. To grow our membership by widening our
appeal to include greater representation
from the not-for-profit sector;
6. To maintain and add some modest
capacity to our regional hubs so that
we can serve our members in all parts
of the UK.
As a membership organisation, we must
put our members first in all we do. If we
can achieve these milestones we will
increase our membership over the term
of our Three Year Plan.
I believe that 2007 has seen progress
towards these objectives. I was delighted to
receive further support from the investing
community about the importance of our
Chartered Director programme. I have just
received a copy of a letter from three large
1
 CHAIRMAN’S REVIEW
US institutions to the companies they invest
in, highlighting the importance of
professional leadership at board level. The
letter says: “This is seen as a primary
contributor to the performance and
prospects of any business. We actively
support the value of the Chartered Director
development programmes and especially
the Chartered Director qualification provided
by the Institute of Directors”.
For me the biggest disappointment of the
year has been the lack of a significant
reduction in onerous regulation and time-
wasting red tape. We have tried hard,
provided much evidence, and made
proposals, but we remain stuck in the
treacle of over-regulation. Action is now
needed, rather than more review bodies!
The IoD pays particular attention to the
governance of the Institute. We do this by
actively considering the balance on the
board, by ensuring appropriate terms of
office for directors, and through the
committees of the board. The board has an
annual effectiveness review, individual
assessment sessions with all directors, a
separate meeting of the chairman and non-
executive directors and feedback to the
chairman conducted by the vice chairman.
We pay particular attention to the risk
assessment and control exercise which
highlights the high level risks for the board,
and the audit and risk committee has a
rigorous programme to consider and review
the control environment. I am also grateful to
the Council members who are able to review
the development of the Institute and to
provide wise counsel to the board and key
office holders. In my view the governance
structure is comprehensive and works well
in giving assurance to our membership.
I am extremely conscious of the substantial
2
input of so many people who give their
time for the benefit of the membership.
There are many dedicated people at
branch, regional and central level who
contribute to our success. This is matched
by the commitment of our staff under the
guidance of the Director General.
It is with great regret that we record the
death of Gregory Hyland, Director of
Regions and Branches, in this Annual
Report. Gregory was a member of the
Board from 24 February, 2004 until his
death on 2 June, 2007. He first joined the
IoD staff in 2000 as Regional Director for
IoD South West. Gregory was a highly
respected and universally popular figure
throughout the IoD and he made a major
contribution to the Institute's success in
recent years. He will be greatly missed.
As the board changes I would like to
thank two retiring members for their
contribution over many years. Lady
Judge stood down in July 2007, and
Michael Large, Vice Chairman, stood
down in December 2007 after 20 years
serving both regionally and centrally in
many ways. Both of them remain strong
supporters of the IoD. We have welcomed
as new members Nicholas Brookes,
Emma Harrison, and Sir Robin Young, all
of whom are contributing significantly.
The year ahead will bring challenges,
including the worsening economic climate.
It will also bring new opportunities. I am
certain that we are well placed to meet all
of these events and that we will continue
to have further success in 2008.
D I R E C T O R G E N E R A L’ S R E P O R T
I am pleased to be able to report another very successful
year for the IoD. Our finances are in even better shape, both
in terms of annual surplus and reserves, and we have
continued to build our external reputation.
The total number of members remains at
a robust level, but 2007 saw a very slight
decline to 52,427. Despite great efforts,
we are still losing members as fast as we
gain them. Our new customer relationship
management system will help target
members more directly and through this
and other methods we need to
understand and meet their needs better,
so that we can retain more members in
the longer term.
However, the profile of new members
shows more diversity, with 19% of new
applicants being female, and there is a
greater proportion of younger,
entrepreneurial directors coming through.
This has helped support our Young
Directors Forum, which is now
established in most parts of the country.
We need to further strengthen our
offering to women and to diverse ethnic
groups, and our Women as Leaders
Conference is a good example of the
kind of focused activity we must pursue.
Our membership services have improved,
with even broader international offerings
from the Information and Advisory Service
and a general improvement in facilities
through our Business Centre and all the
services in Pall Mall. Our hospitality
offering remains first class and I get
consistently positive feedback on our
performance from members.
Miles Templeman
DIRECTOR GENERAL
Our regional presence is strong, both in
the provision of local events and the
influencing of regional and local
authorities. Our affinity partners and
various sponsors continue to provide
much support and add to our
membership offering, although, as many
members tell me, the result of all this
activity is too much direct mail. We are
dealing with this, and most importantly,
we are taking some major steps to
improve our online activities. These
should become more apparent in 2008
and beyond. Our website, iod.com, has
been enhanced and it will continue to
develop. Our intranet is also much
improved and I have also started a policy
blog – more to come.
Events in 2007 ranged from major
international seminars on India and
China, to many large and small
gatherings covering a whole list of policy
areas, and some very enjoyable Sporting
Lunches. We had another very successful
Annual Convention, with Jacqueline Gold
and Sir Ranulph Fiennes stealing the
show, while José Manuel Barroso
surprised many Euro-sceptic members
with his openness and appreciation of the
needs of business. The EU appears to
have taken on board the Regulation
message, though we’ve yet to feel any
real impact. The Annual Dinner, with
outstanding speeches by Sir Martin
3
 D I R E C T O R G E N E R A L’ S R E P O R T
Sorrell and Bill Bryson, also illustrated
that our longstanding events are as
popular as ever.
Professional Development remains at the
heart of our activities, with further expansion
of our courses and particularly Chartered
Director, where the number qualifying has
now reached over 600 and is growing
steadily. We will move to build this in the
future, and give more support and focus to
our alumni. Additionally, we are developing
an International Training Plan that is an
important aspect of our Three Year Plan for
2008–2010. The focus will be on the
developing world and establishing directors’
courses in various centres, with particular
emphasis on corporate governance.
Media activity has been greater than ever,
with all members of the Policy Unit
appearing in the press and on TV and
radio. Many members have appreciated
our increased profile and understand the
value of this visibility in trying to influence
the Government on a whole range of
topics, with tax, skills, transport and
climate change/energy being the most
significant. We continue to lobby for an
improvement in the regulatory
environment, and one day I hope to be
able to report some success. We had
some recent impact on tax changes, but
the real art is getting the Government to
involve us more fully before making ill-
thought through announcements and
then having publicly to backtrack.
In addition to our engagement with the
Government, we have further
strengthened our connection with the
Conservative Party – the team and I
regularly meet with the Conservative front
4
bench – and also with the Liberal
Democrats. The IoD remains steadfastly
independent of any political party and we
held fringe meetings at all the party
conferences, which were well attended.
In the EU, our Corporate Governance
lobbying organisation, ecoDa, had a
good year, with new members joining
from Croatia, Slovenia, Poland and the
Czech Republic, bringing its membership
to 10 EU country members. It is gaining
strength and we regularly meet with the
Commission to discuss EU policies. Our
main objective is to keep increases in
corporate governance to a minimum and
not to be influenced by the US approach.
Internally, we have had a lot of positive
management changes with several key
players taking on new responsibilities in
IT, Marketing, Director Publications and
Professional Development. We continue
to focus on management development
activities to strengthen the overall skills
level of our leading executives and to
drive good management practice through
the organisation.
Overall, 2007 has been another very
enjoyable and successful year, not least in
the IoD Regions and Branches, and I
thank all our volunteer chairmen and
committee members, as well as our staff,
around the country. The economy in the
short term looks tough, but our ongoing
improvements and the energy of our team
will, I am sure, enable us to progress,
even in a difficult UK environment.
FINANCIAL REVIEW
Overall Results
During 2007 the Institute made a record
operating surplus before tax for the fourth
consecutive year, £2,159k - £12k ahead
of 2006.
At 31 December 2007 the Accumulated
Fund stood at £7,714k compared with
£5,834k a year earlier, an increase of
£1,880k, which reflects the continuing
growth of the Institute’s Membership and
Revenue Earning Activities and control of
expenditure.
Net funds increased by £2,463k to
£14,225k at the end of 2007, as shown
in the Consolidated Cash Flow
Statement, page 17.
INCOME
Membership Income
Membership income increased by £581k
to £14,572k in 2007 (up 4.2%). This
reflects an increase of £629k in
membership subscriptions (up 4.9%), and
a decrease of £48k in election fee income
(down 4.2%). The number of members
was 52,427 at the end of 2007,
representing a net loss of 363 in
membership in the year.
Membership contribution increased by
£557k to £12,522k in 2007 (up 4.7%), as
shown in Analysis of Operating Surplus
by Activities, page 18.
Revenue Earning Activities
Income from revenue earning activities
decreased by £166k (down 0.9%) to
£17,416k, reflecting harsh economic
conditions and reductions in income for
Director Publications, Director
Development, and Director Events.
Catering and functions increased its
income by £199k to £5,069k (up 4.1%),
resulting from organic growth, 2006
prices being held. Income generated in
the Restaurant and Brasserie remained
static, although the second floor function
rooms at 116 Pall Mall achieved an 8%
increase in income year on year. The
Wine Bar reflected the experience of
equivalent operations with a 6% decrease
in income, mainly alcohol revenue,
following on from the smoking ban taking
effect in July 2007. Overall contribution
increased by £74k to £1,187k (up 6.6%).
An increasingly competitive advertising
market continued to have an adverse
effect on Director Publications’ income,
which decreased by £246k in the year to
£2,386k (down 9.3%). Direct costs and
overheads were closely monitored with
the result that costs were reduced by
8.7% compared with 2006.
Although Director Development income
decreased by 1.6% in 2007, due in part
to a depleted Board Development sales
team, contribution increased by £81k to
£2,118k (up 4.0%) resulting from the
newly structured course programme
being embedded in the year.
Since re-organisation and refurbishment,
income growth in the Business Centre
was further consolidated by an increase
of £57k to £2,370k (up 2.5%).
Contribution increased by £8k to £1,721k
(up 0.5%). Maximum occupancy at prime
times has nearly been reached.
Director Events income decreased by
5
 FINANCIAL REVIEW
£210k to £1,515k (down 12.2%) mainly
due to tough competitive conditions
which adversely affected ticket sales, and
the fact that certain planned events had
to be cancelled.
Product Marketing income increased by
£115k to £1,029k (up 12.6%) reflecting
continued growth in affinity products
providing preferential travel and financial
services benefits for members.
Overall contribution from revenue earning
activities decreased by £78k to £5,649k
(down 1.4%), as shown in Analysis of
Operating Surplus by Activities, page 18.
EXPENDITURE
Total expenditure of £33,458k is analysed
across Membership, Revenue Earning
Activities, Member Services, Operating
and Overhead Costs and Representation
and Directorate, as shown in Analysis of
Operating Surplus by Activities, page 18.
Employment Costs
Employment costs increased by £374k to
£14,516k, reflecting bonuses and
commissions paid to staff based upon a
record operating surplus and progress
against objectives. Overall the basic
salary increase was restricted to 3.6% in
2007. The average number of employees
increased to 318 (2006: 295), although
the average number of monthly paid staff
decreased by one in the year to 265.
Capital Expenditure
Major projects undertaken at 116 Pall
Mall included the refurbishment of the
6
passenger lifts, and the floor
strengthening in the Waterloo Room - one
of the Institute’s premier members’
function areas. Significant capital
investment was incurred in refurbishing
the main kitchen and the installation of
new air conditioning equipment. New
boilers were installed at 123 Pall Mall, and
the telephone system was upgraded for
all IoD premises.
Further amounts were invested in IT,
including a new HR system, server
enhancements, and software
development for iod.com. Additionally the
IoD’s staff intranet was upgraded and re-
launched in the year.
Creditor Payment Policy
The Institute supports the work of the
Better Payment Practice Group and has
signed up to their Code of Conduct. For
all trade creditors, it is the Institute’s
policy to agree terms of payment with
suppliers, at the start of business, and to
ensure that they are paid in accordance
with the agreed contractual and other
legal obligations. Trade creditors for the
year ended 31 December 2007 averaged
17 days, based on the ratio of the
Institute’s trade creditors to the amounts
invoiced during the year.
Donations
The total amount given for charitable
purposes during the year was £13,000
(2006: £16,000). As a membership
organisation we do not consider it
appropriate to use members’
subscriptions for charitable giving unless
it arises directly from the Institute’s
FINANCIAL REVIEW

educational work. Going Concern

No political donations were made during The Board considers that the Institute
the year (2006: nil). has adequate resources to continue in
operational existence for the foreseeable
Cash Reserves future. For this reason, the going
concern basis continues to be adopted in
The Audit and Risk Committee has
preparing the financial statements.
recommended and the Board has agreed
that we build up our cash reserves, net of
deferred membership income, to a level
that matches our annual fixed costs,
comprising property and staff overheads,
in order to provide protection against a
prolonged economic downturn. The
relevant figures are:
2007 2006

Cash reserves at 31 December £14.2m £11.8m

– see Consolidated Cash Flow
Less deferred membership income (£8.0m) (£8.1m)
– see notes 12&13
Net cash reserves at 31 December £6.2m £3.7m
Target cash reserves / annual £14.1m £13.8m
fixed costs
Net cash reserves as percentage 44.0% 26.8%
of target

7
 GOVERNANCE OF THE INSTITUTE
1. Aims and Objects of the IoD
The IoD’s Charter states that its objects are:
(a) to promote for the public benefit high
levels of skill, knowledge, professional
competence and integrity on the part of
directors, and equivalent office holders
however described, of companies and other
organisations;
(b) to promote the study, research and
development of the law and practice of
corporate governance, and to publish,
disseminate or otherwise make available the
useful results of such study or research;
(c) to represent the interests of members and
of the business community to government and
in the public arena, and to encourage and
foster a climate favourable to entrepreneurial
activity and wealth creation; and
(d) to advance the interests of members of
the Institute, and to provide facilities, services
and benefits for them.
2. Activities of the IoD
Professional Development – the Institute
provides training and professional
development both in the UK and, to a lesser
degree, elsewhere. This takes the form of
courses, conferences and seminars, as well
as its Diploma in Company Direction and the
prestigious Chartered Director qualification.
Business Representation – through the
Director General and the Policy Unit, the
Institute represents the interests of members
and the business as a whole to Government
(both in the UK and the EU) and to
opposition parties and influential
representative bodies. Government consults
the Institute both publicly and privately. The
Policy Unit publishes widely respected policy
and research documents.
8
Members’ Benefits and Services – the
Institute provides premises in London and in
the regions for the use of members.
Members also are given access to
information and advisory services, as well as
information via the website, newsletters and
two regular magazines. Products and
services such as a gold credit card,
discounted insurance, car hire and health
service are offered to members, as well as a
variety of events, including the Annual
Convention at the Royal Albert Hall and the
Annual Dinner. More details are available on
www.iod.com.
3. Principal Goals
The Board has a major Strategy Awayday
meeting each October, which is reviewed six
months later, and it tackles various strategy
issues at regular Board meetings. The
Principal Goals emerging for the next three
years are:
Expanding Professional Development, both
Nationally and Internationally. In the
International context, it should spread the
IoD brand, influence and reputation,
particularly in the field of Corporate
Governance, as the UK is considered the
world leader on this topic. In addition to
Corporate Governance, training will also
focus on financial and strategic management
thereby enabling directors and their boards
to be fully aware of their responsibilities and
to improve their performance. Following on
from the expansion of the Chartered Director
programme in 2007, there is a significant
challenge to ensure continuing assessment
and validation of the entire process remains
robust. Ethics have been embedded
throughout the syllabus, and if properly
promoted, will add value, trust, and loyalty.
GOVERNANCE OF THE INSTITUTE
Expanding Membership both Nationally and
Internationally. We should continue to grow
and we have been tasked with expanding in
the ‘Third Sector’, which includes the Public
Sector, Senior Civil Servants, Quangos and
Government type Institutions, Trusts,
Charities, the National Health Service,
Influential and Representative Bodies, Policy
Groups, Heads of Secondary Schools, the
Armed Forces, Pension Fund Trustees and
one or two other associated bodies.
We shall establish the views of the
membership as a whole from online surveys.
Member programmes and benefits will be
changed or modified accordingly. With a view
to promoting diversity, we shall encourage the
aspirations of ethnic minorities, entrepreneurs,
women and younger directors.
Provision of Regional Premises – is seen as
very important going forward. We believe that
the future will bring significantly more virtual
corporations, and that employers will
increasingly encourage their staff to work
remotely or at home to save time, cost and
travel. Directors will require meeting facilities
in key locations. The IoD has recognised this
need and will investigate the expansion of its
regional network.
Advances in IT and the Internet – have been
so significant that exploiting what it facilitates
goes way above enablement and it is our
strategy to seek expert views on what it will
be doing ten years hence and to adapt the
working of every department to take
advantage of these facilities. This will include
regular staff training and encouragement of
staff to keep abreast of developments and
the incredible rate of change and to adapt
quickly rather than react. Communications
will feature significantly. This is also a risk
mitigating approach.
The IoD is currently engaged in upgrading its
website, www.iod.com, which will incorporate
the latest internet developments and e-
commerce functionality. Additionally our back
office systems will be consolidated onto one IT
platform which will link directly with the
website. The upgraded software and
development work is planned to be completed
by the end of 2008, which will result in more
effective electronic communication with
members, as well as encouraging members to
engage with the IoD online on a regular basis.
Security arrangements will be built into the new
systems to ensure there is protection against
unauthorised access of data.
Reputation – we aim to extend our
reputation, influence and representation to
ensure that our members have a very strong
voice to lobby government, Whitehall and
other influential and representative bodies and
Europe for the benefit of our membership.
4. Governance and Control of
the Institute
The Institute is a corporation established
under Royal Charter. The IoD’s Constitution,
comprising Charter, By-Laws and
Regulations, may be found on the IoD’s
website, www.iod.com. The Institute’s
principal office is at 116 Pall Mall, London
SW1Y 5ED.
The Institute is committed to a high standard
of governance and has adopted, wherever
appropriate, the provisions of the Combined
Code, which sets out Principles of Best
Corporate Governance for listed companies.
The Institute has selected only the provisions
of the Code that are applicable given the size
and nature of its operations and with due
regard to its operation as a membership
9
 GOVERNANCE OF THE INSTITUTE
Corporation established under Royal Charter.
The government and control of the Institute
are vested in the Board and the Council of the
Institute. Members of these bodies are listed
on page 25, indicating relevant dates for
those who joined or departed during the year.
Council – The Council is primarily the body that
is the guardian of the Constitution and of the
aims and nature of the Institute. It appoints and
may remove members of the Board and it
reviews the overall performance of the Board. It
also appoints the Nomination Committee. The
Nomination Committee considers the balance
of skills needed by the Board and considers
candidates, including any nominations put
forward by the membership, and makes
recommendations to the Council in respect of
appointments to the Board. Such nominations
are put as a courtesy to the Board in advance.
An induction programme is in place for new
members of the Council and the Board. The full
rules regarding Council and Board are set out
under By-laws and Regulations Clauses D & E
respectively. Council Members also provide a
pool of expertise, which the Chairman and DG
may consult on a range of policy issues and for
contacts. The Council, chaired by the
Chairman of the Board usually meets with all
members of the Board in attendance by
invitation, but they may at any time require that
some or all members of the Board should not
to be present. The Council met three times
during the year. The Chairman is the only
member of both the Council and the Board.
Board – The affairs of the Institute are
managed by the Board who may exercise all
the powers of the Institute, including the
power to propose changes to the Laws of
the Institute. The Board meets at least six
times per annum and also holds a Strategy
Awayday meeting during October.
10
In accordance with its Constitution, the
Chairman and the DG have a clear division of
responsibilities and the Board comprises a
majority of Non-Executive Directors. The
effectiveness of the Board is assessed
annually. Periodically an external assessment
will be commissioned, the last having taken
place in 2004. Training for all or for individual
Board members is considered annually
following the Annual Effectiveness
Assessments of the Board and of individual
directors. NEDs and the DG are individually
assessed by the Chairman and the Chairman
is assessed by the Vice Chairman. Executive
Directors are assessed by the DG or the COO.
At least once per annum the Chairman holds a
meeting with the NEDs without the executives
present. The Institute Secretary is charged with
ensuring that Board procedures are complied
with. All Board members are required to
disclose to the Institute Secretary any interests
they may have in other commercial and policy
entities and in public bodies.
Committees during 2007
Membership of the IoD’s Committees is set
out on page 25. Three Committees dealt
specifically with governance issues:
The Nomination Committee, appointed by
the Council and chaired by the Chairman,
recommended any nominations for elected
members of the Council, and any
appointments to the Board and it met as
necessary. All members of the Committee,
except the DG, are independent members of
the Council or the Board.
The Audit and Risk Committee, (‘A&RC’)
appointed by the Board and chaired by Mr
Simon Brooker, FCA, covered matters
relating to the financial statements, audit and
risk management, and it met three times
during the year.
GOVERNANCE OF THE INSTITUTE
The A&RC undertakes an annual internal
review of its effectiveness under the direction
of the Committee Chairman.
The A&RC considers annually whether there is a
need for an internal audit function and the view
remains that the size of the Institute does not
warrant it at this stage. It is the Institute’s policy
to separate the provision of audit and non-audit
services, but the Board may waive this policy, in
specific cases, if it considers such waiver to be
in the best interests of the Institute.
The Remuneration Committee, appointed
by the Board and chaired by the Chairman, in
accordance with the Institute’s Constitution,
advised on the remuneration of senior
members of staff and it met as necessary.
In addition the activities of the Institute were
greatly assisted by three advisory
committees, which each met twice per
annum or more regularly as appropriate and
they included outside experts:
The Professional Accreditation Committee,
chaired by Mr Peter Hammonds, advised on
Chartered Director, professional standards,
and the award of the Diploma and Certificate
in Company Direction.
The Taxation Committee, chaired by Mr
Graham Wheeler, advised on taxation.
The Membership Committee, chaired by Mr
Ian Dormer, advised on membership diversity
and services provided by the Institute.
The IoD’s Committees comprise a large
number of people who voluntarily give their
time and effort on behalf of the Institute and
their contribution is significantly valued.
5. Practices
5a IoD Ethics, Corporate Responsibility,
the Community and Diversity Policy Statement
The IoD demands a very high standard of
ethical behaviour in all of its internal and
external dealings, and has a strong belief in
the value of diversity throughout the
organisation, clearly reflecting the spectrum
of British Society and the Business
Community as a whole. The IoD should be
seen as a model example to other
companies in both of these areas, as in its
standards of Corporate Governance. The
Institute has a policy of equal opportunities in
employment and continued to promote
diversity and inclusion throughout the year.
Diversity awareness training sessions were
run for all new staff in 2007 to ensure
understanding and compliance.
Our approach as a good citizen to corporate
responsibility and to the community, is
embedded in our employment contracts and
a range of Standard Guidance Notes,
available to all staff on our intranet. Within
reason Department Heads will allow staff
time off to undertake appropriate work in the
community. We aim to behave in an
exemplary manner with all our stakeholders,
the principal one being our members.
5b Employees
The calibre, values and conduct of our
people are central to building excellent
relationships with our members, customers,
suppliers and other stakeholders.
Consultation with employees or their
representatives has continued at all levels. The
annual opinion survey measures the attitudes
and opinions of IoD employees on a range of
issues. In 2007 the overall results were more
positive in nearly all areas under review compared
with 2006, and demonstrate the continued
commitment and satisfaction of our staff. Action
is being taken to address issues raised.
11
 GOVERNANCE OF THE INSTITUTE

Communication with employees has continued closely with our managers and employees to
via quarterly all staff meetings on business promote diversity and inclusion.
progress, Departmental staff briefings, the
5e Training and Development
Institute’s intranet, IoD News, and the
The Institute continued to invest in the
distribution of the Annual Report and the Three
recruitment and training of employees,
Year Plan. Every employee has an individual
providing a range of training and
responsibility to work together as a team to
development interventions geared towards
further the purposes and ideals of the IoD.
individual needs and organisational priorities.
The aim is to ensure employees’ views are A significant management development
taken into account when decisions are made programme, designed in consultation with
that are likely to affect their interests, and that the Management Team, has been rolled out
they are aware of the financial and economic to all middle and senior Managers in 2007.
performance of their Departments and of the
5f Health & Safety
Institute as a whole. The Institute is
The IoD has a H&S Committee and the HR
accredited with the quality benchmark
department strives to ensure that all
“Hospitality Assured”.
employees are provided with a safe and
5c Open Disclosure Policy appropriate environment in which to work. It
The Institute has an ‘Open Disclosure Policy’ complies with H&S legislation and
(sometimes known as a ‘Whistle-Blowing Regulations.
Policy’), made available to all staff on the
5g Environmental Policy
Intranet under SGN 2.25. Any matter
In respect of its ‘Member premises’ and its
reported under this heading has received
‘workplace’, and its effect on the environment
proportionate and independent investigation
(locally and in general), the IoD is committed
and the Senior Management Team has
to implementing best practice and to
ensured appropriate follow-up action.
providing a safe and sound environment. The
5d Values Board will implement, as appropriate, all
The IoD continued to embed its five new current environmental legislation including
values into its culture during the year. various European Union Directives and will
take account of the views of the IoD’s Health
Values related questions and measurement
and Safety Committee on relevant matters. It
criteria have been incorporated into the
will endeavour to use sustainable and
recruitment process. The Institute also
renewable materials, to minimise energy
measured the degree to which its values
wastage and to follow sound practice for all
were embedded into the organisation via
waste product disposals.
mechanisms such as the staff opinion survey
and appraisals, and has identified a number
of resulting actions.
6. Internal Control during 2007
The Institute has a policy of equal
The Board was responsible for the Institute's
opportunities in employment. It also
systems of internal control.
endeavours to make reasonable adjustments
to the workplace to enable staff to work, or The key features of the internal control
continue working at the Institute. We work system that operated throughout the period
12
GOVERNANCE OF THE INSTITUTE

covered by the financial statements were: The Board reviews the risk report submitted
by the A&RC twice per annum and debates
A clear organisation structure for monitoring
specific risk aspects as and when they arise.
the conduct and operation of the Institute
with defined reporting lines, levels of In preparation for the consequence of a
responsibility and delegation of authority. disaster, there is in place an ‘Immediate
Action Plan’ and a longer term ‘Disaster
Communication of ethical values and a
Recovery Plan’. These plans are regularly
controls awareness through written codes
reviewed and revised.
of conduct, formal standards of discipline
and employee performance appraisal. The Institute annually reviews its insurance
portfolio and considers risks not covered with
Regular consideration by the Board of
due regard to cover taken by similar
management accounts.
organisations. We believe that we have
Three meetings of the A&RC, including a adequate and broad cover. Insurance
review of the Institute's risk management premiums are kept at a sensible level by
and discussions with the external auditors ensuring cover levels are adequate for a big
with regard to the scope of the audits and hit, but balancing this against a ‘retained risk’
the contents of their reports to amount, so that claims are only made if
management. substantial. We have also managed to
arrange a capped premium for Business
Schedules of ‘Matters Reserved to the continuity for three years.
Board’ and of ‘Levels of Authority and
Authorisation Procedures’, approved by the The A&RC has reviewed the operation and
Board, the latter comprising the detailed effectiveness of this framework. The
management rules, remain in place. Committee acknowledges there are inherent
limitations in any system of risk control and
internal financial control and accordingly even
7. Risk Management the most effective system can provide only
reasonable and not absolute assurance with
In accordance with the guidance of the
respect to risk mitigation, the preparation of
Turnbull Committee on internal control, there
financial information and the safeguarding of
is an ongoing process in place for identifying,
reputation and assets.
evaluating and managing risks faced by the
Institute. There is a Risk Register, which is
regularly reviewed and which sets out key
risks, the likelihood of those risks occurring
and the associated potential impact. It also
notes mitigation steps and considers whether
residual risk is satisfactory. The A&RC review
a report on risk from Management twice per
annum. This report includes financial,
commercial, reputation, health and safety,
staff wellbeing risks and potential risks arising
from advances in IT and the Internet.
13
 INDEPENDENT AUDITORS’ REPORT
to the members of the Institute of Directors (the “Institute”)
We have audited the consolidated financial
statements of the Institute of Directors for the
year ended 31 December 2007 which
comprise the consolidated revenue account,
consolidated balance sheet, consolidated cash
flow statement, the consolidated statement of
total recognised gains and losses and the
related notes. These financial statements have
been prepared under the accounting policies
set therein.
Respective responsibilities of directors
and auditors
The Board’s responsibilities for preparing the
annual report and the financial statements in
accordance with the By-Laws and applicable
accounting standards in the United Kingdom
are set out in the statement of Board’s
responsibilities.
Our responsibility is to audit the financial
statements in accordance with relevant legal
and regulatory requirements and International
Standards on Auditing (UK and Ireland). This
report, including the opinion, has been prepared
for and only for the Institute’s members as a
body and for no other purpose. We do not, in
giving this opinion, accept or assume
responsibility for any other purpose or to any
other person to whom this report is shown or
into whose hands it may come save where
expressly agreed by our prior consent in writing.
We report to you our opinion as to whether the
financial statements give a true and fair view. We
also report to you, if in our opinion, the Institute
has not kept proper accounting records or if we
have not received all the information and
explanations we require for our audit.
We read other information contained in the
annual report, and consider whether it is
consistent with the audited financial
statements. This other information comprises
only the Chairman’s Review, the Director
General’s Report, Financial Review and
Statement on Governance of the Institute. We
14
consider the implications for our report if we
become aware of any apparent misstatements
or material inconsistencies with the financial
statements. Our responsibilities do not extend
to any other information.
Basis of audit opinion
We conducted our audit in accordance with
International Standards on Auditing (UK and
Ireland) issued by the Auditing Practices Board.
An audit includes examination, on a test basis,
of evidence relevant to the amounts and
disclosures in the financial statements. It also
includes an assessment of the significant
estimates and judgments made by the Board
in the preparation of the financial statements,
and of whether the accounting policies are
appropriate to the Institute’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to
obtain all the information and explanations
which we considered necessary in order to
provide us with sufficient evidence to give
reasonable assurance that the financial
statements are free from material
misstatement, whether caused by fraud or
other irregularity or error.
In forming our opinion we also evaluated the
overall adequacy of the presentation of
information in the financial statements.
Opinion
In our opinion the financial statements give a
true and fair view of the state of the
consolidated affairs of the Institute at 31
December 2007 and of the consolidated
revenue surplus and consolidated cash flows
of the Institute for the year then ended.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
London
31 March 2008
CONSOLIDATED REVENUE ACCOUNT

for the year ended 31 December 2007

NOTES 2007 2006

£’000 £’000

INCOME
1 Membership income 14,572 13,991
Revenue earning activities 17,416 17,582
Other trading income 2,890 2,303
Interest receivable and similar income 739 526
_________ _________
35,617 34,402
_________ _________

EXPENDITURE
2 Employment costs 14,516 14,142
Direct costs 7,839 7,269
3 Indirect costs 5,743 5,602
Property expenditure 4,094 3,991
Depreciation 1,266 1,251
_________ _________
33,458 32,255
_________ _________
Surplus on ordinary
activities before taxation 2,159 2,147

4 Taxation (234) (156)

_________ _________
Surplus on ordinary
activities after taxation
____
1,925
____
1,991

All operations in the year and in the comparative

year were continuing.

Statement of total recognised gains and losses

Surplus on ordinary activities after taxation 1,925 1,991

Closed defined benefit scheme:

Actuarial (loss)/gain (45) 238
_________ _________
Total recognised gains and losses relating
to the financial year
____
1,880
____
2,229

15
 CONSOLIDATED BALANCE SHEET

at 31 December 2007

NOTES 2007 2006

£’000 £’000

FIXED ASSETS
Intangible fixed assets
Publication rights of Director magazine 2 2
5 Tangible fixed assets 5,476 5,378
6 Investments 20 20
_________ _________
5,498 5,400
_________ _________
CURRENT ASSETS
7 Stock 168 104
8 Debtors 3,014 2,815
9 Short term investments 13,712 11,749
10 Short term bank deposit 10 500
10 Cash at bank and in hand 503 –
_________ _________
17,407 15,168
_________ _________
CURRENT LIABILITIES
11 Creditors – amounts falling due within one year (7,159) (6,118)
12 Deferred membership income (7,018) (7,175)
10 Bank overdraft – (487)
_________ _________
(14,177) (13,780)
_________ _________
Net current assets 3,230 1,388
_________ _________
Total assets less current liabilities 8,728 6,788
_________ _________

13 CREDITORS
Amounts falling due after more than one year (969) (954)
_________ _________
Net assets excluding pension liability 7,759 5,834

15 Pension liability (45) –

_________ _________
Net assets including pension liability ____
7,714 ____
5,834

Represented by:
14 ACCUMULATED FUND
Accumulated fund at 1 January 5,834 3,605
Surplus on ordinary activities after taxation 1,925 1,991
Actuarial (loss)/gain (45) 238
_________ _________

____
7,714
____
5,834

The financial statements on pages 15 to 24 were approved by the Board on 31 March 2008 and were
signed on its behalf by:
Miles Templeman Director General
Simon Brooker FCA Director
Richard Turner FCA Finance Director
16
C O N S O L I D A T E D C A S H F L OW S TA T E M E N T

for the year ended 31 December 2007

2007 2006
£’000 £’000

Net cash inflow from operating activities 3,375 2,845

(see reconciliation below)
Returns on investments and servicing of finance
Interest received 426 514
Taxation
UK Corporation tax paid (156) (113)
Capital expenditure
Payments to acquire tangible fixed assets (1,495) (1,669)
_________ _________
Cash inflow before use of liquid resources 2,150 1,577
Management of liquid resources
Purchase of short-term investments (1,650) (1,800)
Decrease / (increase) in short-term deposits with bank 490 (214)
_________ _________
Increase / (decrease) in bank current account in the year ____
990 ____
(437)

Reconciliation of surplus on ordinary activities

to net cash flow from operating activities
Surplus on ordinary activities before taxation 2,159 2,147
Depreciation on tangible fixed assets 1,266 1,251
Loss on disposal of fixed assets 131 92
_________ _________
3,556 3,490
Interest receivable and similar income (739) (526)
_________ _________
2,817 2,964
(Increase) / decrease in trade debtors (229) 233
(Increase) in other stock, other debtors and prepayments (34) (129)
Increase / (decrease) in trade creditors 451 (110)
(Decrease) / increase in other creditors and accruals (172) 520
Increase / (decrease) in multiple years’ advance membership over one year 15 (114)
(Decrease) / increase in deferred membership income (157) 245
Increase / (decrease) in other deferred income 684 (264)
Difference between pension charge and cash contributions – (500)
_________ _________
Net cash inflow from operating activities ____
3,375 ____
2,845

Reconciliation of net cash flow to change in net funds

(Decrease) / increase in cash in the year 990 (437)
Increase in liquid resources (see note below) 1,160 2,014
_________ _________
Cash flows 2,150 1,577
Net change in market value of short-term investments over cost 313 12
_________ _________
Change in net funds 2,463 1,589

Net funds at 1 January 11,762 10,173

_________ _________
Net funds at 31 December ____
14,225 ____
11,762

Note: Liquid resources comprise short-term deposits and investments

that mature within twelve months from date of inception.
17
 A N A LY S I S O F O PE R AT I N G S U R P LU S B Y AC T I V I T I E S

for the year ended 31 December 2007

2007 2007 2007 2006

Income Expenditure Net Net
£’000 £’000 £’000 £’000

MEMBERSHIP INCOME
Membership subscriptions 13,360 – 13,360 12,769
Election fees 1,088 – 1,088 1,136
Overseas capitations 124 – 124 86
_________ _________ _________ _________
14,572 – 14,572 13,991
MEMBERSHIP EXPENSES
Marketing and membership 12 (2,062) (2,050) (2,026)
_________ _________ _________ _________
14,584 (2,062) 12,522 11,965
REVENUE EARNING ACTIVITIES
Catering and functions 5,069 (3,882) 1,187 1,113
Director publications 2,386 (2,270) 116 146
Director development 5,047 (2,929) 2,118 2,037
Business centre 2,370 (649) 1,721 1,713
Director events 1,515 (1,582) (67) 254
Product marketing 1,029 (455) 574 464
_________ _________ _________ _________
17,416 (11,767) 5,649 5,727
MEMBER SERVICES
Regional services 2,296 (4,578) (2,282) (2,348)
Member information and advice 275 (1,210) (935) (1,003)
_________ _________ _________ _________
2,571 (5,788) (3,217) (3,351)
OPERATING AND OVERHEAD COSTS
Property costs – (4,136) (4,136) (3,877)
Depreciation – (1,223) (1,223) (1,212)
IT and iod.com – (2,499) (2,499) (2,123)
Central administration – (3,298) (3,298) (3,192)
_________ _________ _________ _________
– (11,156) (11,156) (10,404)

REPRESENTATION AND DIRECTORATE

Policy and directorate 307 (2,552) (2,245) (2,093)
Communications – (133) (133) (223)
_________ _________ _________ _________
307 (2,685) (2,378) (2,316)
_________ _________ _________ _________
Interest receivable 739 – 739 526
_________ _________ _________ _________
35,617 (33,458)
_________ _________
_________ _________

Surplus on ordinary activities before taxation

____
2,159
____
2,147

18
NOTES TO THE ACCOUNTS

for the year ended 31 December 2007

1 ACCOUNTING POLICIES of the building at 116 Pall Mall, which is held

The Institute of Directors is not subject to the
Companies Act 1985. However, these financial
statements have been prepared in accordance with
applicable Accounting Standards in the United
Kingdom and incorporate the disclosures required by
the Companies Act 1985 in respect of directors'
emoluments for a private limited company. A summary
of the more important policies, which have been
consistently applied with the prior year, unless
otherwise disclosed, is set out below:
(a) Basis of accounting and consolidation
These financial statements have been prepared under
the historical cost convention and comprise
the consolidated accounts of the Institute, its wholly
owned subsidiaries, The Director Publications
Limited, IoD Management Limited and iod.com limited.
under a lease expiring in 2043, are maintained to a
standard which is consistent with their revenue
earning potential.
(f) Pension scheme
During 2007 the Institute operated both a non-
contributory defined contribution pension scheme for
benefits accruing from 1 January 1997 and a closed
defined benefit pension scheme. The assets for
both schemes are held separately from those of the
Institute and are administered by trustees.
(g) Overseas currencies
Assets and liabilities denominated in foreign currencies
have been translated into sterling at the rate of exchange
current at the year end, and profits and losses are
taken through the Consolidated Revenue Account.

(b) Membership income (h) Short term investments

Annual membership subscriptions are included in the Sterling fixed and floating rate securities held as short
Consolidated Revenue Account on an accruals basis term investments are included in current assets at market
applicable to the membership period, and the part of value. Variations in their year end value are accounted for
the subscription applicable to the following year is through the Consolidated Revenue Account.
carried forward as deferred income. In the case of
multiple year membership subscriptions, an annual (i) Stock
allocation is included within the Consolidated Revenue Stock is valued at the lower of cost and net realisable value.
Account, the unutilised income being carried forward
to future years. Election fees are accounted for on a 2007 2006
receipts basis.
2 EMPLOYMENT COSTS
(c) Tangible fixed assets (a) The average number of
Tangible fixed assets are recorded at historic cost, employees during the year was: 318 295
together with any incidental costs of acquisition. _________ _________
Depreciation is calculated on a straight line basis over
the expected useful economic lives of the assets £’000 £’000
concerned. The principal annual rates used for this (b) Salaries 10,640 10,355
purpose are:
Social security 1,111 1,058
Leasehold improvements 10%
Pension costs – see note 15 1,092 1,075
Furniture, fittings and other equipment 20 – 25%
Other employment costs 1,673 1,654
Computing equipment 33 1⁄3% _________ _________
14,516 14,142
(d) Operating leases
____ ____
Costs in respect of operating leases are charged on a
straight line basis over the lease term. (c) The Chairman received £15,000 for his services
during the year (2006: £10,000). Other than the
(e) Property maintenance Chairman, non executive directors received no
Under the terms of the various leases held by the emoluments for services provided (2006: £ nil).
Institute there is an obligation to keep the relevant
properties in a proper state of repair. These costs
together with the rentals are charged as incurred.
In addition the Institute ensures that the public areas
19
 NOTES TO THE ACCOUNTS

for the year ended 31 December 2007

2007 2006 £’000 £’000

£’000 £’000
3 INDIRECT COSTS
(d) Emoluments paid to the General Administration 3,203 3,136
Director General amounted to: Marketing and Promotion 1,369 1,460
Salary 271 263 Professional fees 772 701
Financial charges 344 252
Performance bonus 57 55
Fees in respect of services
Pension contributions 39 38
provided by the auditors:
Benefits-in-kind 28 32 Statutory audit 48 43
_________ _______
Tax advisory services 7 10
395 388 _________ _______
_________ _______ 5,743 5,602
_________ _______
Pension contributions are paid
into a money purchase scheme. 4 TAXATION
Current tax:
(e) Executive directors’ UK Corporation tax (234) (156)
____ ____
emoluments excluding pension
contributions Corporation tax is payable only on the Institute's externally
derived sources of income and on activities undertaken by
Director General - 2(d) above 356 350
_________ _______ The Director Publications Limited – the Institute's wholly
6 other directors owned subsidiary. The Institute's membership activities
(2006: 6 directors) are outside the charge to corporation tax.

Salary 486 536 No provision for deferred taxation is required. There is

Bonus 148 155 a potential tax asset of £19,000 relating primarily to
capital allowances, which would only be recoverable in
Benefits 26 26
_________ _______ the future if capital expenditure was significantly below
current planned level.
660 717
_________ _______
Aggregate emoluments 1,016 1,067 5 TANGIBLE FIXED ASSETS
_________ _______ Leasehold Furniture Motor
Improvements & Fittings Vehicles Total
Aggregate value of pension £’000 £’000 £’000 £’000
contributions paid in respect
of money purchase benefits Cost
Director General – 2(d) above 39 38 At 1 Jan 2007 7,677 8,324 42 16,043
6 other directors 97 101 Additions 1,001 494 – 1,495
(2006: 6 directors) Disposals (349) (56) – (405)
_________ _______ ________ ________ ________ ________
136 139 At 31 Dec 2007 8,329 8,762 42 17,133
_________ _______ ________ ________ ________ ________
Depreciation
Retirement benefits are accruing
At 1 Jan 2007 3,603 7,041 21 10,665
to 6 directors (2006: 6 directors)
under a money purchase scheme. Charge for the year 639 617 10 1,266
Disposals (228) (46) – (274)
________ ________ ________ ________
(f) Highest paid director
At 31 Dec 2007 4,014 7,612 31 11,657
________ ________ ________ ________
Total amount of emoluments 356 350
_________ _______ Net book
Value of pension contributions value 2007 4,315 1,150 11 5,476
____ ____ ____ ____
paid in respect of money Net book
purchase benefits 39 38 value 2006 4,074 1,283 21 5,378
_________ _______ ____ ____ ____ ____
The Institute does not hold any assets under finance
leases (2006: £ nil).
20
NOTES TO THE ACCOUNTS

for the year ended 31 December 2007

6 FIXED ASSET INVESTMENTS 10 CASH AT BANK AND IN HAND

Investments represent the cost of a 1% shareholding in Cash at bank and in hand includes £266,000 (2006:
Stonemartin plc, being 1,019,345 ordinary shares £238,000) held in overseas branches.
of 20p. The market value of the shares at 31 The analysis of the movement in the balance is as
December 2007 was £52,000 (2006: £78,000). follows:
at 31 Dec Cash at 31 Dec
2007 2006
2006 Flows 2007
£’000 £’000
£’000 £’000 £’000

7 STOCK
Short term bank deposit 500 (490) 10
Food, wines, liquor 120 82 Cash at bank and in hand (487) 990 503
Books and stationery 47 20 _________ _________ _________
13 500 513
Other stock 1
_________
2
_________
____ ____ ____
____168 ____104
2007 2006
£’000 £’000
2007 2006
£’000 £’000
11 CREDITORS
Amounts falling due within
8 DEBTORS one year:
Trade debtors 1,782 1,553
Trade creditors 1,284 833
Other debtors and prepayments 1,232 1,262
_________ _________ Deferred non membership income 2,363 1,679
3,014 2,815
____ ____ Other creditors and accruals 3,278 3,450
Taxation 234 156
9 SHORT TERM INVESTMENTS _________ _________
7,159 6,118
____ ____
Market Market
Value Cost Value Cost
2007 2007 2006 2006 2007 2006
£’000 £’000 £’000 £’000 £’000 £’000

12 DEFERRED MEMBERSHIP
i) Fixed and
INCOME
floating interest
securities 1,401 1,350 11,749 11,700 Membership subscriptions
_____ _____ _____ _____ received in advance 6,436 6,380
ii) Clydesdale Multiple years’ membership
Bank subscriptions applicable to
6,154 6,000 – – the following year 582 795
_________ _________
iii) Bank of
Scotland 6,157 6,000 7,018
____ 7,175
____
_____ _____ _____– _____–
_____ _____ _____ _____
13,712 13,350 11,749 11,700 2007
£’000
2006
£’000

i) The investment is held in a short term sterling liquidity 13 CREDITORS

fund, with a "triple A" Moody's investor service rating, Amounts falling due after more
managed by Barclays Global Investors Limited. The than one year:
securities held are akin to cash invested in an interest
Multiple years’ membership
bearing bank deposit account, the monies being
subscriptions received in advance 969 ____
____ 954
realised by the giving of 24 hours' notice.
ii) The investments are held in short term interest
bearing sterling deposit accounts operated by banks
with a “double A” Moody's investor service rating, the
monies being realised by the giving of 7 days notice.
The difference between cost and market value
represents interest accrued to the year end. 21
 NOTES TO THE ACCOUNTS

for the year ended 31 December 2007

14 LEASE COMMITMENTS date. The principal financial assumptions adopted

The Institute has annual commitments under for that actuarial valuation were: investment return
non-cancellable operating leases as follows: at 4.8% per annum and price inflation at 2.9% per
annum. Future pension increases were assumed at
2007 2006
the rates specified in the closed scheme rules.
2007 Motor 2006 Motor
Property Vehicles Property Vehicles
£’000 £’000 £’000 £’000 2007 2006
£’000 £’000
Operating leases
which expire:
Pension contributions paid were:
Within one year – 11 – 18
1997 defined contribution scheme 992 1,075
In the second to
fifth years inclusive 185 6 108 6 Closed scheme 100 600
_________ ________
In over five years 1,236 – 1,243 – Total cost 1,092 1,675
_____ _____ _____ _____ ____ ____
1,421 17 1,351 24
____ ____ ____ ____
Financial Reporting Standard no. 17 disclosure
(FRS 17) relating to the closed scheme
The property leases are subject to rent reviews.
Rental costs charged to the Consolidated Revenue A subsequent valuation of the closed scheme in
Account in the year were: accordance with the requirements of FRS 17 has
2007 2006 been prepared by a qualified actuary on the basis
£’000 £’000
of membership data current at 31 December 2007
but taking into account increases to pensions in
Property 1,442 1,309
payment effective from 1 January 2008.
Motor Vehicles ____
42 ____
49
at at
31 Dec 31 Dec
15 PENSION COSTS 2007 2006
£’000 £’000
During 2007 the Institute operated both a non-
contributory defined contribution pension scheme
Employee benefit obligations
for benefits accruing from 1 January 1997 and a
closed defined benefit pension scheme (the “closed Amounts recognised in the
Balance Sheet are:
scheme”). The assets for both schemes are held
separately from those of the Institute and are Defined benefit obligations
- see analysis below (5,966) (6,665)
administered by trustees, and both schemes are
registered with HM Revenue and Customs. Fair value of plan assets
- see analysis below 6,971 6,885
With effect from 1 January 1997 (the “closure date”), Surplus before allowing
the defined benefit scheme became closed to new for deferred taxation 1,005 220
entrants and ceased to provide any further benefit Irrecoverable surplus (1,005) (220)
accrual to the then active members who became
entitled to deferred pensions, subject to statutory Recognised pension asset – –
revaluation as from that date. Members of this Related deferred tax liability – –
Net pension asset
scheme were contracted out of the state earnings ____– ____–
related pension scheme for service periods up to
the closure date. Amounts recognised in
the Consolidated Revenue
The most recent formal actuarial valuation of the Account are:
closed scheme was undertaken as at 1 January 2006 Service cost (100) (100)
using the defined accrued benefit method and market
Interest on obligations (341) (323)
related funding assumptions. The market value of
Expected return on plan assets 385 324
the scheme’s assets was £6,142,000 which on the
Total (56)
(99)
method and the assumptions adopted, represented ____ ____
87% of the value of the liabilities at the valuation
22
NOTES TO THE ACCOUNTS

for the year ended 31 December 2007

at at Major categories of plan assets as a percentage of

31 Dec 31 Dec total plan assets are:
2007 2006
at at
£’000 £’000
31 Dec 31 Dec
2007 2006
Change in defined benefit
obligations are: UK equities 54% 54%
Obligations at 1 January (6,665) (6,850) UK bonds 44% 45%
Service cost (100) (100) Principal actuarial assumptions
Interest on obligations (341) (323) at the Balance Sheet date:
Actuarial gains/(losses) 796 267 Discount rate 5.9% pa 5.2% pa
Benefits paid 344 341 Expected return on plan assets 5.7% pa 5.7% pa
Obligations at 31 December Price inflation 3.3% pa 3.1% pa
- noted above (5,966) (6,665)
____ ____ Pension increases:
Post 1988 guaranteed
Change in fair value of plan
minimum pension 2.8% pa 2.6% pa
assets are:
Discretionary awards no allowance no allowance
Assets at 1 January 6,885 6,112
Mortality:
Expected return 385 324
Pensioner life expectancy
Investment (losses) / gains (56) 190
– by year of birth pxa92 mortality tables
Employer contributions 100 600
Proportion married 90%
Benefits paid (343) (341)
Age difference husbands 3 years
Assets at 31 December older than wives
- noted above 6,971 6,885
____ ____ Age at retirement normal pension age
Commutation no allowance
As the pension surplus is irrecoverable, the annual
increase of £785,000 has been treated as an
Sensitivity to changes in assumptions:
actuarial loss in the Statement of total recognised
gains and losses. The assumptions as to
at at
discount rate and price
31 Dec 31 Dec inflation have a significant
2007 2006 effect on the value placed
on the defined benefit
Actual return less expected obligations.
return on pension scheme assets (56) 190 As at 31 December 2007,
a 1% change in these
Experience gain/(loss) arising on assumptions would have
scheme liabilities 234 (65) had the following effect
on the closing defined
Changes in financial assumptions
benefit obligations:
underlying the scheme liabilities 562 333
1% PA 1% PA
Increase in irrecoverable surplus (785) (220) increase decrease
_________ _________ £’000 £’000
Actuarial (loss)/gain disclosed in
(45) 238
Statement of total recognised ____ ____ Discount rate £742k (£951k)
gains and losses
Price inflation (£215k) £298k
The expected future rate of return at year end has
been derived as the average, weighted by the year
end portfolio allocation of the following returns for
each separate asset class: cash, 5.5% pa; bonds,
4.6% pa and equities, 6.6% pa. The actual return on
scheme assets over 2007 amounted to £329,000
compared with an expected return of £385,000.
23
 NOTES TO THE ACCOUNTS

for the year ended 31 December 2007

2007 2006 2005 2004 2003

£’000 £’000 £’000 £’000 £’000

Five year historic record at 31 December:

Defined benefit obligations (5,996) (6,665) (6,850) (6,187) (6,066)
Plan assets 6,971 6,885 6,112 5,335 5,100
Surplus/(deficit) 1,005 220 (738) (852) (966)
Experience adjustments on plan liabilities 234 (66) 4 (48) (76)
Experience adjustments on plan assets (56) 190 554 225 315

16 CAPITAL COMMITMENTS 2007 2006

£’000 £’000

Contracted capital expenditure 67 –

____

24
COUNCIL, BOARD AND COMMITTEES

as at 31 December 2007

COUNCIL BOARD

Chairman Non-Executives Taxation & Economic

Dr Neville Bain Dr Neville Bain (Chairman) Graham Wheeler (Chairman)
Ian Dormer (Vice Chairman) Adrian Baird
Elected members Damian Bradley
Michael Large (Vice Chairman)
Richard Boot (departed 25.07.07)
Simon Brooker Roger Coates
Ald Sir David Brewer CMG
Nicholas Brookes (joined 11.04.07) Malcolm Gammie CBE QC
Nicholas Brookes (departed 11.04.07)
Philippa Foster Back OBE Brian Jackson
Nicholas Cook (joined 11.04.07)
Emma Harrison (joined 11.04.07) Robert Langston
Michael Foote
Peter Holland Andrew Lis
Alex Galloway (joined 11.04.07)
Lady Judge (departed 31.07.07) Peter Mason
Peter Hammonds
Sir Hugh Sykes Michael Templeman
Professor F R Hartley
Graham Wheeler Tim Voak
Alan Jenkins (joined 25.07.07)
Sir Robin Young KCB (joined 11.04.07)
Patrick Lawless Professional Accreditation
Dr Ann Limb Executives Peter Hammonds (Chairman)
The Rt Hon Lord Newton of Miles Templeman (Director General) Philippa Foster Back OBE
Braintree OBE (Vice Chairman)
Andrew Main Wilson (COO)
The Rt Hon Lord MacGregor of Philip Arnold
Bill Adams
Pulham Market OBE Tim Boucher
(departed 25.07.07)
Vernon George (joined 21.05.07)
Professor Colin Coulson-Thomas
Dr Mary Redmond Gregory Hyland (see page 2)
Alex Galloway
Gerald Russell (joined 25.07.07) Alan Morkel
Professor Bob Garratt
Derek Wilson Richard Turner
Denis Lester
Sir Robin Young KCB
Colin Melvin
(departed 11.04.07) COMMITTEES
Roger Mills-Hicks
Regional Members Audit & Risk Sally Muggeridge
Frank Bryan Simon Brooker (Chairman) Ken Rushton
Jerry Golland Richard Boot Beverley Salt
John James (departed 02.04.07) Robert Oxley John Williams
Ann Jordan Rosco Paterson
Nomination
Paul Keith (joined 28.11.07) Dr Michael Young
Dr Neville Bain (Chairman)
Bill McGawley
Membership Miles Templeman (Director General)
Robert Oxley (joined 11.04.07)
Ian Dormer (Chairman) Ald Sir David Brewer CMG
Rosco Paterson (joined 11.04.07)
Alyson Howard Ian Dormer
Derrick Sequiera (departed 11.04.07)
Michael Large Michael Foote
Andrew Sturgess
Clive Thomas Peter Hammonds
Nimble Thompson
Michael Large
Stuart Turner (departed 11.04.07) Remuneration
Sir Hugh Sykes
Richard Wallace Dr Neville Bain (Chairman)
John White Miles Templeman (Director General)
Gareth Williams Simon Brooker For Council and Board Members, we
have indicated the dates for those
Nicholas Brookes
members who joined or departed during
Peter Holland the 2007 calendar year.
25
 S TA T E M E N T O F B O A R D ’ S R E S P O N S I B I L I T I E S
As a corporation established by Royal
Charter, the Institute is obliged to
comply with its Constitution (comprising
Charter, By-Laws and Regulations).
The Constitution requires that the Board
lays before the Institute financial
statements for each financial year which
give a true and fair view of the state of
affairs of the Institute and of the surplus
or deficit of the Institute for that period.
The Board is responsible for keeping
proper accounting records that disclose
with reasonable accuracy at any time
the financial position of the Institute.
Additionally the Board is responsible for
safeguarding the financial welfare and
assets of the Institute and hence for
taking reasonable steps for the
prevention and detection of fraud and
other irregularities.
The Board confirms that it has complied
with the above requirements in preparing
the financial statements and that
26
suitable accounting policies have been
used and applied consistently, subject to
any material departures disclosed and
explained in the financial statements
The Board also confirms that reasonable
and prudent judgements and estimates
have been made in the preparation of
the financial statements for the year
ended 31 December 2007, and that
applicable accounting standards have
been followed and that the financial
statements have been prepared on the
going concern basis.
The Annual Report and Accounts are
published on the Institute's website on
www.iod.com/annualreport. The Board
is responsible for the maintenance and
integrity of the website.
REGIONS, BRANCHES, CENTRES AND AFFILIATED BODIES
as at 31 December 2007
REGIONS Cumbria
Chairman: Roger Collinge
East Midlands
Chairman: Peter Fothergill Devon and Cornwall
Chairman: Richard Ayres
East of England
Chairman: Jerry Golland Cambridgeshire
Chairman: Chris Parkhouse
North East
Chairman: Bill McGawley East Yorkshire
Chairman: Richard Tuplin
North West
Chairman: Ann Jordan Edinburgh
Chairman: Rebecca Cuthbert
South
Chairman: Robert Oxley Essex
Chairman: Paul Rolison
South West
Chairman: Paul Keith Dundee
Chairman: Dr Nigel Kerby
West Midlands
Chairman: Richard Boot Fife
Chairman: Shona Mitchell
Yorkshire
Chairman: Nimble Thompson Glasgow
Chairman: Neville Washington
Gloucester
DIVISIONS
Chairman: Benita Sutton-Cegarra
Northern Ireland Hampshire and The Isle
Chairman: Frank Bryan of Wight
Chairman: Avril Owton
Scotland
Chairman: Andrew Sturgess Hereford & Worcester
Chairman: Michael Greensmith
Wales
Chairman: Gareth Williams Hertfordshire
Chairman: John Stevens
Highlands & Islands
UK BRANCHES
Chairman: Paul Houlden
Kent
Aberdeen
Chairman: Frazer Thompson
Chairman: Ken McEwan
Berkshire Lancashire
Chairman: Chris Dodson Chairman: Nina Lockwood
Black Country Leicestershire
Chairman: John Rider Chairman: Rachel Hargrave
Bristol Lincolnshire
Chairman: Nick Sturge Chairman: James Pinchbeck
Buckinghamshire Liverpool
Chairman: David Pritchard Chairman: Ian Spink
Central London Manchester
Chairman: Jim Kelly Chairman: Bill Docherty
Cheshire Milton Keynes
Chairman: Nick Robinson Chairman: Philip Smith
City of London Norfolk
Chairman: David Brewer Chairman: Nick Farrow
Coventry & Warwickshire Northamptonshire
Chairman: Philip Cornwall Chairman: Martin Strauss
North Wales
Chairman: Steve Donnelly
North Yorkshire
Chairman: Chris Harrington
Nottinghamshire & Derbyshire
Chairman: Murray Macnab
Oxfordshire
Chairman: Bruce Hunt
Somerset
Chairman: Guy Bottard
South Wales
Chairman: Robin Morrison
South Yorkshire
Chairman: Richard Wagstaff
Suffolk
Chairman: Tim Ryan
Surrey Downs
Chairman: Tony Cherrett
Sussex
Chairman: Leonard Stall
Wessex
Chairman: Jonathan Clark
West Surrey
Chairman: Michael Price
West Thames
Chairman: Peter Firth
West Yorkshire
Chairman: David Winterburn
Wiltshire
Chairman: Jon Lamonte
OFFSHORE BRANCHES
Bailiwick of Guernsey
Chairman: Shelagh Mason
Isle of Man
Chairman: Geoff Hunt
Jersey
Chairman: Simon Radford
EUROPEAN CENTRES
(Excluding the UK)
Continental European Branch
Chairman: David Demetrius
Belgium
Chairman: Frank Laske
Germany
Chairman: Frank S Laske
Netherlands
Chairman: Karel D Waagenaar
France
Chairman: Philippe Cizeau
OVERSEAS CENTRES
Bermuda
Chairman: Reg Rawlins
Cyprus
Chairman:
Evdokimos Xenophontos
Malta
Chairman: James Satariano
Monaco
Chairman: William Easun
AFFILIATED BODIES
The Hong Kong Institute
of Directors
CEO: Carlye Tsui
Institute of Directors,
Republic of Ireland
President: Laura Magahy
CEO: Eoin O’Shea
Institute of Directors, Nigeria
President: Olusola Dada
The Institute of Directors
in Southern Africa
Chairman: Shepherd Shonhiwa
Executive Director: Tony Dixon
Institute of Directors,
Zimbabwe
Chairman: David Mutambara
ASSOCIATED BODIES
The Australian Institute
of Company Directors
CEO: Ralph Evans
Canada
Institute of Corporate Directors
President/CEO:
Beverley Topping
The Institute of Directors
in New Zealand
CEO: Dr Nicki Crauford
27
 PREMISES

116 Pall Mall IoD Edinburgh

London SW1Y 5ED The Royal Scots Club
29 Abercromby Place
also at: Edinburgh EH3 6QE
120 Pall Mall
123 Pall Mall IoD hub Manchester
1 Pall Mall East Peter House
Oxford Street
IoD hub City of London Manchester M1 5AN
New Broad Street House
35 New Broad Street IoD Nottingham
London EC2M 1NH Trent Bridge
Nottingham NG2 6AG
IoD Belfast
Ulster Reform Club IoD Paris
4 Royal Avenue France-Amériques
Belfast BT1 1DA 9/11 avenue Franklin
D. Roosevelt
IoD hub Birmingham 75008 Paris
One Victoria Square FRANCE
Birmingham B1 1BD
IoD hub Reading
IoD Brussels Davidson House
Le Plaza Hotel Forbury Square
Boulevard Adolphe Max Reading RG1 3EU
Laan 118-126
1000 Brussels
BELGIUM

IoD Cardiff
The Park House Club
20 Park Place
Cardiff CF10 3DQ

28
F I V E Y E A R S U M M A RY 2003 2004 2005 2006 2007

No. of members at Year End 53,473 53,268 52,780 52,790 52,427

Surplus/Deficit before Tax (£k) 647 1,350 1,824 2,147 2,159
Gross Income (£k) 30,145 31,755 33,268 34,402 35,617
Net Assets (£k) 1,817 2,194 3,605 5,834 7,714
Fixed Asset Investment (£k) 1,236 1,822 2,155 1,669 1,495
Investments & Cash Balances (£k) 8,201 9,285 10,173 11,762 14,225
Net Assets as % of Gross Income 6.0% 6.9% 10.8% 17.0% 21.7%
Fixed Asset Investment as % of
Gross Income 4.1% 5.7% 6.5% 4.9% 4.2%
Investments & Cash Balances as
% of Gross Income 27.2% 29.2% 30.6% 34.2% 39.9%
The Institute of Directors

Annual Report
and Accounts 2007