2020-12-31-accounts

The Chartered Quality Institute Annual Report 2020

“ There is now a great opportunity for the quality profession to help organisations compete in the so-called new normal and deliver societal value by embedding social and environmental policy and plans into their management systems.”

CQI President’s foreword

he pandemic that has engulfed our world overshadowed most T of 2020 and its effects, which have been wide reaching, will be felt for many years to come.

Weathering the storm has not been easy, so I must commend the CQI and its members for quickly responding to the many issues presented by the pandemic. I am particularly proud of how our Board, staff and volunteer teams have risen to the challenges.

During this time, COVID-19 and Brexit have shifted perceptions of organisational excellence. These disruptive events have underlined the potential for technology to create new value and new ways for customers to access value. They have exposed the importance of resilience in supply chains. They have also shone a light on the social purpose of organisations of all kinds. Indeed, the coronavirus shift has reflected many of the trends outlined in our Future of Work report, which was

published in the months before the pandemic struck. The report was not only timely in setting out the context for change, but in defining how quality management can drive this change.

There is now a great opportunity for the quality profession to help organisations compete in the so-called new normal and deliver societal value by embedding social and environmental policy and plans into their management systems.

Quality: Past, Present and Future – published in 2019 during our centenary year – highlights how the quality profession has evolved and adapted over time, and its crucial role in shaping the future. The CQI provides the focal point to collaborate with and lead our profession out of this pandemic, so we look forward to supporting you all on that important journey.

Lord Jamie Lindsay, President, Chartered Quality Institute

CQI President’s foreword[|] Annual Report 2020[|] 1[|]

“I am proud of what we have done to keep our operations running safely and provided the information and services our members need under exceedingly difficult circumstances.”

| 2 | Annual Report 2020 | Chair’s introduction

Chair’s introduction

s our world adjusts to life in a COVID-19 environment, I reflect on A the past year with mixed feelings. The pandemic has caused suffering and hardship for so many. It has put a strain on governments, healthcare services and businesses, and it is clear we will be contending with the consequences for some time.

Despite this, the spirit of collective purpose in the fight against the coronavirus has been remarkable, not least within the CQI community. From my Trustee colleagues to our volunteer members and staff, the CQI has shown immense resilience and dedication over the past year. I would like to thank them all for their incredible work in supporting the customers and partners that we serve globally.

I am proud of what we have done to keep our operations running safely and provided the information and services our members need under exceedingly difficult circumstances. I am delighted that we were also able to deliver financial results in 2020 that place us in a good position to pursue our strategic goals.

The CQI’s clarity of purpose and resilience of governance and operational business systems played a key part in our performance last year. Equally, our culture and values of innovation, inclusion and integrity have provided a solid

foundation for the agility and adaptability our teams have shown.

This is my last year serving as Chair of the CQI’s Board of Trustees, and not quite the year I had anticipated. However, it has been a privilege to serve my professional body as a Trustee for nine years; to have served as your Chair during the CQI’s centenary in 2019; to have witnessed the joy of our International Quality Awards winners receiving their trophies; and to have steered the Institute through the development of its 10-year strategy. But most of all, it has been immensely satisfying to work with, support and learn from the members, volunteers and CQI colleagues that make up our diverse global community.

I leave the profession at an inflection point as it enters the digital age. The CQI has this firmly in its sights, and I have every confidence that, as the Institute continues to champion quality management and lead the profession, it will increase both its value and membership.

Ian Mitchell, Chair of the Board of Trustees, Chartered Quality Institute

Chair’s introduction[|] Annual Report 2020[|] 3[|]

Trustees’ report

For the year ended 31 December 2020

Our Impact – 2020 Highlights

As a registered charity with a Royal Charter, our purpose is to champion quality management in all : sectors for the benefit of society. We deliver on this mission through[1]

• The contribution made by CQI members and IRCA certificated auditors in supporting and improving the quality of products, services and organisations

• The training and education delivered through our approved training partners (ATPs) and university courses

• The research we perform to advance the discipline of quality management methods and tools

• The policy outreach we conduct to support and influence UK and global quality infrastructures

1 The Trustees confirm they have referred to the Charity Commission’s guidance on public benefit when reviewing the Institute’s aims and objectives, planning future activities and setting the annual operating plan.

| 4 | Annual Report 2020 | Trustees’ report

“In 2020 we worked with partners and volunteers to host 131 virtual events on quality management topics for over 8,000 quality professionals.”

In 2020, we worked with partners and volunteers to:

Host 131 virtual events on quality management topics for over 8,000 quality professionals.

Launch Quality Connect: an online platform that allows our 19,000 quality management and auditing professionals to network freely across profession, industry and location.

Publish two Managing Disruptive Change tools and provide dedicated website content, which are helping quality professionals navigate the pandemic and Brexit.

Support 223 new mentoring relationships through our online mentoring platform, contributing to the further career development of professionals working in quality management.

Recognise excellence in the profession and showcase the value of quality management to organisations and society through our 2020 International Quality Awards, which received entries from 107 individuals and organisations from 23 countries.

Run three Learning from Excellence webinars, which allowed our 2019 awards finalists and winners to share their stories of good practice.

Support the creation and launch of the Quality Practitioner apprenticeship in England as a way to develop quality management skills for industry. We also celebrated the Quality Apprenticeship Trailblazer Group’s success in winning the 2020 MOD Inspiring Leadership Quality Award and our International Quality Award for Outstanding Contribution to Quality Management Practice.

Encourage and support our ATPs to offer online learning for CQI|IRCA certified training courses, which resulted in 22,336 learners completing a virtual course.

Join the European Organisation for Quality to collaborate on promoting and developing quality management and established links with European quality researchers to support our planned Quality 4.0 research agenda.

Represent the profession through our liaison status with ISO and contribute to the development of food safety, quality and occupational health and safety standards. We represented the profession in the development of the new ISO Corporate Governance Guide, the latest revision of Annex SL and future concepts for ISO 9001.

Run our World Quality Day 2020 campaign to underline the importance of quality management in creating customer value – we received almost 11,000 unique web page views, over 1.5k logo and toolkit downloads.

Trustees’ report[|] Annual Report 2020[|] 5[|]

CQI Member Network Highlights

Our branches and special interest groups (SIGs) came to the fore in 2020. In response to the pandemic, they adapted their activities quickly and effectively from face-to-face networking to virtual events.

We trained volunteers in the use of new technologies and the result was a comparable number of events to those that would have otherwise happened physically. The events engaged and supported members and provided an essential supplement to the content that the CQI provided centrally.

A number of the webinars put on by the networks dovetailed with the priorities identified by the CQI’s COVID-19 response ‘Tiger Team’, with branches including Northern Ireland and the East of Scotland running events on remote auditing. Other branches continued to deliver CPD events determined by the needs of their local members, but to an expanded global audience. A Leicester & Coventry webinar with Dame Judith Hackitt was particularly successful, with an audience (258) many times higher than any pre-COVID-19 event.

Geographical boundaries were no longer a barrier to members attending networking events and gaining value from their membership. International members, especially IRCA members, were able to participate in branch and SIG events for the first time.

SIGs also continued to work on their other less public facing, but no less important, activities, which included the development of sector-specific ‘next generation’ programmes.

At the end of a year that would have been considered successful even in less challenging times, there were signs of greater things to come with three new SIGs and a Caribbean branch in development for 2021.

CQI Standards Panel Highlights

Despite the challenges posed by the pandemic, the CQI Standards Panel continued to meet virtually rather than face-to-face over the course of the year.

During this time, the membership and primary purpose of the panel remained the same:

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• To design, develop, maintain and review CQI policy and position relating to the development and implementation of CQI approved standards

• To identify potential opportunities for the CQI to influence standards development for the benefit of its stakeholders. Subsequently, to build the case for CQI direct participation/CQI approved standard status

• To commission research, as necessary, that will feed into the CQI’s position on generic standards development

Panel members were actively involved in quality, occupational health and safety, and food safety standards work both domestically via BSI and internationally via ISO.

Quality-related standards work included an examination of how best protect and preserve the brand reputation of ISO 9001 and also identifying quality ‘future concepts for inclusion’. The CQI has also participated in:

• Task Force 4, created to produce a new edition of Annex SL, “the Standard Writers’ Standard”

• The development of ISO 45002 – guidelines for: the implementation of ISO 45001, ISO 45003; manging psychosocial risk and ISO 45005; and safe working during the COVID-19 pandemic

• Occupational health and safety future concepts

Food safety is also growing in prominence. Over the course of the last year, our food safety panel representative participated in ISO TC34 and assisted with the revision of FSSC 22000.

The Standards Panel has also played a critical role in the CQI review of sponsored standards activity, member surveys, and development of the new regime for CQI standards activity, which was launched in 2021.

IRCA Japan Highlights

Japan was one of the earlier countries to be impacted by COVID-19, so the team had to adapt to remote working and restrictions on face-to-face activities from early February 2020. Despite these restrictions, IRCA Japan continued to show growth, closing 2020 with a record register of 3,581 auditor certifications. Through a strong relationship with both training providers and large corporates, new member acquisition and retention of existing members remained strong. As a result, IRCA Japan’s royalty payment to CQI in 2020 exceeded budget.

Trustees’ report[|] Annual Report 2020[|] 7[|]

Our strategy

In 2019, which marked the CQI’s centenary year, we published our 2020-2030 strategy ready for our journey into the next 100 years. Our 2020 annual report is therefore structured around the five strategic themes on which our strategy is built. It also takes account of the pandemic’s impact.

Our five strategic themes

Align operating model

Improve our systems, processes and people to deliver the strategy.

Redesign offerings

Enhance value for individual and corporate members through digital and expanded member services.

Lead quality management practice

Invest in research and CPD to demonstrate the relevance of the profession to organisations within the future world of work.

Broaden the scope of the profession

Positive changes in our discipline and profession

The quality management discipline

A broader scope: will be embraced by organisations and allied professions.

Technology: will adapt to support digital transformation and improvement.

Trust and guardianship: will support ethical decision making and performance improvement.

Strategic quality: will shift focus from the tactical to the strategic.

Agility and adaptability: will adapt to the increasing speed of change.

Gain the support of allied professions in delivering excellence in governance, assurance and improvement.

Grow our global influence

Become more actively involved in quality communities around the world, recognising the complex environments in which members operate.

The quality profession

Global influence: will be able to operate in an increasingly complex and fast-moving global context.

Automation/Internet

of Things: will embrace technology in the design of business models and systems.

Big data: will embrace data and analytics to drive improvement at speed.

New behaviours and

roles: will focus on strategic leadership, improvement and championing organisational conscience.

Diversity: will embrace wider scopes of experience, skills and backgrounds to deliver its wider breadth and new roles.

Learning: will maintain value through increased life-long learning.

To deliver...

In response to...

| 8 | Annual Report 2020 | Trustees’ report

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Positive changes in our
discipline and profession
The quality management discipline
A broader scope: will be Technology: will
embraced by organisations adapt to support
and allied professions. digital transformation
and improvement.
Trust and guardianship:
will support ethical Strategic quality: will
decision making and shift focus from the tactical
performance improvement. to the strategic.
Agility and adaptability:
will adapt to the increasing
speed of change.
The quality profession
Global influence: will New behaviours and
be able to operate in an roles: will focus on
increasingly complex and strategic leadership,
fast-moving global context. improvement
and championing
Automation/Internet organisational conscience.
of Things: will embrace
technology in the Diversity: will embrace
design of business wider scopes of experience,
models and systems. skills and backgrounds
to deliver its wider
Big data: will embrace breadth and new roles.
data and analytics to drive
improvement at speed. Learning: will maintain
value through increased
life-long learning.
In response to...
----- End of picture text -----

Key external trends

The global trade challenge – of shifting global trade arrangements, emerging compliance requirements and new markets and supply chains, which will require organisations to adapt to new opportunity and risk.

The technology challenge – of Industry 4.0 technologies (connectivity, quantum computing, big data and artificial intelligence) in transforming business models and systems, and the nature of work.

The demographics challenge – of ageing populations putting pressure on skills and public services, and diversity in society, organisations and teams.

The personal value challenge – of providing value to customers and consumers in a digital age, combined with the pressure on organisations to satisfy the widening societal and stakeholder expectations.

To provide...

Value for society

In terms of improved quality of product, service, organisation, and improved sector and national competitiveness.

To achieve...

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Our vision
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A world in which organisations of all types and sizes thrive by providing outstanding value for customers, stakeholders and society.

Trustees’ report[|] Annual Report 2020[|] 9[|]

OUR 2020 PERFORMANCE

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52
online events our staff
and volunteers held
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Pandemic Response

In response to the onset of COVID-19 in the first quarter of 2020, we adapted our operating plan and priorities for the year.

Plans, Principles and Assumptions

We established three principles that would drive our decisions:

• Safety – to protect our staff, volunteers, members and partners

• Value – to provide support for our customers and society

• Sustainability – to ensure the CQI remained financially sustainable

We established a three-phase plan:

• Phase 1: Stabilise – to immediately pivot CQI staff and volunteer community into remote working from 17 March 2020

• Phase 2: Adapt – to adapt our operations and activities to the pandemic context from April to December 2020

• Phase 3: Recover – to ensure our planning supports the principle of financial sustainability,

• and to adapt our strategy based on the pandemic experience from May 2020 to quarter 1 2021

We based our plans on one key assumption:

• That the pandemic would continue to impact the world, our customers and our organisation significantly until at least summer 2021

| 10 | Annual Report 2020 | Trustees’ report

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52 46%
online events our staff learners who completed
and volunteers held training virtually in 2020
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Governance and Management

The CQI Trustees immediately adapted the CQI’s governance activities, including those of its subcommittees, to focus on the principles and plan above. Our senior management team, which acted as the executive pandemic management team, met daily throughout 2020.

Stabilise Phase – Our Executive Director –

Corporate Services led this workstream, updating our systems, processes and equipment to achieve safe remote working and staff wellbeing.

Our business continuity plan was tested the week before the UK went into its first lockdown and was implemented successfully on 17 March 2020. Our earlier implementation of Office 365 proved serendipitous as the governance, volunteer and executive moved to remote working and to deliver our ‘stabilise’ phase. Providing for the equipment needs of staff was the first order priority, followed quickly by the need to put in place new ways of working to ensure good communication. Our monthly staff meeting provided the focal point to keep the staff team up to date on plans and progress. Wellbeing and inclusion were important topics to support resilience throughout the year and, following UK government guidance, we opened the physical office based on robust, risk-based arrangements for those who needed to use it for business critical or wellbeing reasons. Although we allowed some annual leave to be carried over to 2021, colleagues were encouraged to take time away from a hectic work environment.

Adapt Phase – Our Executive Director – Membership and Commercial led a crossfunctional ‘Pandemic Tiger Team’ to understand customer and stakeholder needs and adapt our plans, activities and services accordingly, working closely with the Institute’s Membership Council.

This was a year when the quality profession had to transform at huge speed to help their organisations navigate disruptive change. To support the quality profession in this change, we created Coronavirus and Brexit information hubs on our website, which have received 9,702 and 3,700 unique visits respectively. We also produced two disruptive change tools related to Brexit and the pandemic, and ran surveys to help the profession understand and share immediate challenges. Our staff and volunteer community held 52 online events covering topics from wellbeing to remote audit. And we supported our ATPs through the swift shift to online learning for CQI|IRCA certified training courses. During this time, we approved 71 providers to deliver courses virtually, which resulted in 42% of learners completing their training virtually in 2020.

Trustees’ report[|] Annual Report 2020[|] 11[|]

Recover Phase – Our Executive Director – Corporate Services led the development of financial scenarios in conjunction with our Finance and Remuneration Committee. This ensured that decisions supported our customer value and safety principles, with a key focus on maintaining free reserves in line with our Reserves Policy and our financial sustainability principle.

As part of this phase, we decided to delay certain activities until the Institute had navigated the pandemic. This included putting on hold:

• New capital investment projects

• New permanent staff recruitment

We recognised that some CQI members and IRCA certificated auditors faced employment challenges as a result of the disruptive changes in 2020. Therefore, we held membership fees at 2020 levels for 2021 for those that paid by our ‘early bird’ deadline of 30 November 2020, and promoted our concessions policy to support members through this difficult time.

The CQI did not make use of the government furlough scheme, as this was not considered in the best interests of longer-term operations and only offered limited financial impact.

In addition to navigating pandemic shift, we delivered much of our planned programme for 2020.

| 12 | Annual Report 2020 | Trustees’ report

Strategic theme 1 – Align operating model

Improve our systems, processes and people to deliver our strategy

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Measure 2020 2019
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Measure	2020	2019
Financial net income (before gains & losses)	£64k	£303k
Capital expenditure	£299k	£152k
% of projects completed	60%	90%
Staff satisfaction (1–10)	7.7	7.3
Volunteer engagement (Net Promotor Score2)	+28	+14
Compliance (with Charity Governance Code)	Compliant	Compliant

2The Net Promoter Score (NPS) is a customer loyalty score, ranging from -100 to 100, calculated by asking customers one question: “On a scale from 0 to 10, how likely are you to recommend this product/company to a friend or colleague?” Any score above 0 reads as ‘good’ because it indicates that a business has more promoters than detractors.

Operating financial outturn

We achieved a surplus before gains and losses of £64k, providing a strong starting position for the 2021 operational plan and maintained our reserves to policy.

Trustees’ report[|] Annual Report 2020[|] 13[|]

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14 [th]
the position we ranked as
one of the top charities to
work for in the UK
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Capital project delivery

We delivered 60% of our planned projects at 36% of the budgeted capital cost. We delayed some capital investment as a result of the pandemic, to allow greater focus on operational delivery.

Staff engagement

We saw a continued improvement in staff satisfaction in 2020, building on the results from 2019. Given that most of 2020 was spent working from home, this is a welcome result.

In 2020, we were ranked in 14th place as one of the top charities to work for in the UK by the Third Sector Best Charities to Work For scheme.

Volunteer engagement

Volunteer satisfaction improved by 14 Net Promoter points from +14 to +28 as we invested in improving support of our member-led professional networks.

In June, we celebrated National Volunteers’ Week, recognising the vital value that our volunteer community of 250 members provides the CQI and the profession.

Improvement projects

Finance system upgrade – We implemented a new finance system to provide a more modern and efficient platform that integrates with other applications. The new system also significantly improves our financial management and reporting capabilities.

Office 365 Adoption – We completed the transfer to the full Office 365 environment at the start of the first COVID-19 lockdown, allowing all staff to work effectively from home.

CQI London office relocation – We planned for our relocation into a new office space, which was completed on 1 April 2021, reducing our accommodation costs by almost half and providing for a more flexible collaboration space for staff and volunteers.

| 14 | Annual Report 2020 | Trustees’ report

Strategic theme 2 – Redesign offerings

Enhance value for individual and corporate members through digital and expanded member services

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Measure 2020 2019
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Measure	2020	2019
CQI member satisfaction (NPS)	+37	+36
CQI member register	8,319	8,268
IRCA auditor satisfaction (NPS) ROW	+43	+35
IRCA auditor register ROW	6,026	6,222
IRCA auditor satisfaction (NPS) Japan	-16	-10
IRCA auditor register Japan	3,581	3,551
Corporate partner register	35	30
Delegates on CQI	IRCA certifed courses	52,699

CQI members and IRCA certified auditors

Maintaining our service and commitment to members was our priority throughout the challenges of 2020. Our success in adapting our offer to support members during the pandemic and improving member value is reflected in Net Promoter Scores (NPS), which saw an increase on 2019 among CQI and IRCA ROW (rest of world) members. After a significant increase in NPS within our Japanese community of certificated auditors resulting from investment in improved content in 2019, 2020 saw a slight drop.

Trustees’ report[|] Annual Report 2020[|] 15[|]

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68
discussions on Quality
Connect since its launch
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Member NPS

NPS

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CQI
50
IRCA ROW
40
IRCA Japan
30
20
10
0
-10
-20
-30
-40
2016 2017 2018 2019 2020
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68 52
discussions on Quality webinars delivered centrally as
Connect since its launch part of our pandemic response
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Improvement projects

Quality Connect – A digital networking and discussion platform for members launched in September 2020. Since then, members have taken part in 68 discussion threads.

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IRCA Japan
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Digital Content – Although this was not planned for 2020, as part of our pandemic response, we developed digital content and events specifically for members. This involved delivering 52 webinars centrally in addition to virtual events hosted by our member-led networks. We also reduced the number of Quality World issues to focus on producing Quality World branded webinars and digital content instead. All webinar recordings are available in the Members’ Area of the CQI website .

IRCA recertification – We moved to online recertification for IRCA members and introduced a new sampling approach to checking Continuing Professional Development and audit experience as part of the IRCA auditor certification process.

The top three attended webinars were:

• How to Hold an Engaging and Compelling Quality Management Review

• Root Cause Analysis

• Principles of Risk

Trustees’ report[|] Annual Report 2020[|] 17[|]

Membership Trends

2020 saw another year of growth in the number of individuals joining the CQI or achieving IRCA auditor certification, which, combined with improved retention rates, resulted in stabilisation in our membership registers and positive foundation for future growth.

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New 1200 CQI
members
IRCA ROW
1000 IRCA Japan
800
600
400
200
0
2016 2017 2018 2019 2020
The IRCA & 10000 CQI
CQI register IRCA ROW
9000
8000 IRCA Japan
7000
6000
5000
4000
3000
2000
1000
0
2016 2017 2018 2019 2020
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CQI member networks

The CQI Membership Council operates the Institute’s network of eight regions, 26 branches and seven special interest groups (SIGs), with the support of the volunteer members and the Professional Networks staff team.

We introduced a new Volunteer of the Year award to recognise and celebrate the time, expertise and impact that our volunteers provide. The inaugural winner in 2020 was Suzanne Hill.

“Volunteering with the CQI has enabled me to give something back to the profession as well as learn new skills; I am very proud of this award and encourage anyone interested in supporting the CQI to step forward and join the movement to increase the profile and value of the quality professional globally.”

Members are a key asset in promoting and developing the profession and we increased our Professional Network (PNet) team with one extra staff member to support the planned growth in member-led networks. As well as providing support to volunteers moving their events online, the PNet team worked with the Membership Council to support struggling networks and established a process to grow our networks in 2021.

Membership Council (MC) Report

The MC had a very successful 12 months working hard to support our networks through the COVID-19 pandemic.

In a year where there was virtually no face-to-face activity, the MC transitioned effectively to remote working. Holding our quarterly meetings and first virtual chairs’ event has enabled us to continue our activity and make use of platforms like Quality Connect. Members of the MC also helped to support networks to hold virtual events as part of our pandemic response.

During the year, we focused on strengthening our network governance and operation through working groups and the creation of new processes. We have already seen success with our ‘at risk network’ process allowing us to identify, at the earliest opportunity, networks that require additional central support to maintain a base level of governance and activity to provide value to members. Going forward, we are preparing to expand our networks with new geographical branches and sector special interest groups, supported by the ‘new network’ process, developed in collaboration with the Professional Networks team.

We are looking forward to developing the MC and working with the executive to grow the networks it supports into 2021 and beyond.

David Smith, Chair, Membership Council

Trustees’ report[|] Annual Report 2020[|] 19[|]

“Overall, we exceeded our forecast, ending the year with 37 organisations within the programme, up from 30 at the end of 2019”

Corporate partners

Our corporate membership programme allows the CQI to gain insight from organisations that helps to inform our strategy and plans. It also provides the opportunity to promote quality management methods and good practice and individual membership to professionals within those organisations. In 2020, we introduced corporate membership for Small and medium-sized enterprises to complement the existing corporate partnership product designed for larger corporates. Overall, we exceeded our forecast, ending the year with 37 organisations within the programme, up from 30 at the end of 2019. As well as benefitting from their own exclusive events programme, which were adapted to be run virtually, our corporates contributed to several pieces of CQI work in 2020. These included the Managing Disruptive Change Guide and the Learning from Excellence webinar series.

CQI corporate partners:

| 20 | Annual Report 2020 | Trustees’ report

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9
training providers approved to
deliver the Quality Practitioner
trailblazer apprenticeship
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Training and education

Despite the pandemic, Approved Training Partners (ATPs) have continued to deliver CQI and IRCA training courses, with many using virtual classroom technology to deliver courses remotely. Although learner numbers were lower than in 2019 (52,934 compared with 77,203 in 2019), they have performed as well as can be expected given the worldwide COVID-19 restrictions. This reduction in learner numbers resulted in a 30%/£585k reduction in revenue from this activity compared with 2019.

Training delegates

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100000 L&D delegates
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
2016 2017 2018 2019 2020
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Improvement Projects

Learning – this was not planned for 2020 but was implemented as part of our pandemic response. We worked with CQI|IRCA ATPs to help provide virtual courses and assessments.

e-Assessment – this extensive project, which we began in 2020 and is likely to launch in early 2022, is designed to deliver all assessments via an online platform, in multiple languages. It will improve the experience of learners and ATPs, and will increase the security of assessments.

Apprenticeships – the CQI worked with a cross-sector group to launch the Quality Practitioner (level 4) trailblazer apprenticeship in September 2020. Nine training providers are now approved to deliver the training. Employers can use the apprenticeship to develop new starters who have recently entered quality and to upskill employees in their current roles.

Trustees’ report[|] Annual Report 2020[|] 21[|]

Strategic theme 3 – Lead quality management practice

Invest in research and CPD to demonstrate the relevance of the profession to organisations within the future world of work.

Key 2020 Projects

• Publish Future of Work Report – delivered

• Establish CQI Research Capability – commenced

• Deliver Quality 4.0 Research – not delivered

• Deliver updated Body of Quality Knowledge – not delivered

• Support the new ISO corporate governance guide – delivered

We focused our research efforts on responding to the pandemic and UK-EU trade deal for our members, which meant that our planned research into Quality 4.0 and impact on the Body of Quality Knowledge was not delivered in 2020 but has been progressed in 2021. Instead, we developed and published COVID-19 and Brexit guides to Managing Disruptive Change.

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“We made contact with heads of profession and genuine thought leaders in other areas, and with several academic institutions in the UK that provide courses and carry out quality management research.”

2020 was an important planning and rebuilding year for our new research and development activity, which focused on providing the quality profession with the insights on the changing external context and assets to adapt and thrive.

Early in 2020, we published our Future of Work report, which proved timely in the content of COVID-19 and Brexit. It has given organisations and professionals a better understanding of growing trends in a digitally-enabled age, their impact on quality management and business, and how these developments should be managed.

Research and Development

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The Future
of Work
A CQI Quality Futures Report
March 2020
----- End of picture text -----

In June, we welcomed Mike Turner, our new Head of Profession, to lead on this work.

Understanding context

The Policy team started the process of scanning the strategic environment in which our members operate, referring to a variety of sources including volunteer networks, member survey data, credible journals, the press and relationships with key stakeholders. As a result of this, we recognised the need for and created the COVID-19 and Brexit Managing Disruptive Change Guide series.

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Managing Disruptive
Change: A Practical Guide
for Quality Professionals
Meeting the Covid-19 challenge
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The importance of collaboration

We made contact with heads of profession and genuine thought leaders in other areas, and with several academic institutions in the UK that provide courses and carry out quality management research. This has helped us to gain useful insights that have shaped our research roadmap for 2021, saved unnecessary duplication and reinforced the value of research work for the first phase of our strategic plan. We have also expanded our network of partners that can support and deliver projects within the roadmap.

Based on these activities, we scoped and planned a research programme for 2021 and 2022 that will develop the Competency Framework and define what the quality professional will require to thrive in our emerging digitally enabled world (the Quality 4.0 world). A world that is shifting its focus to sustainability, which has the United Nations Sustainable Development goals at its core. In support of this research, we planned for the creation of a new Research Advisory Panel comprised of respected academics, consulting-based thought leaders, and CQI members and corporate partners. The panel’s purpose is to advise on our 2021 research projects.

Trustees’ report[|] Annual Report 2020[|] 23[|]

Standards and Conformity Assessment

The CQI’s Standards Panel continued to work with BSI and ISO in 2020 in support of standards development.

CQI ISO liaisons	CQI ISO liaisons
ISO/TC 176	Quality Management and Quality Assurance
ISO/TC 176/SC 1	Concepts and Terminology
ISO/TC 176/SC 2	Quality Systems
ISO/TC 176/SC 3	Supporting Technologies
ISO/TC 283	Occupational Health and Safety Management
ISO/TC 309	Governance of Organizations

We published a briefing note to the revised ISO Annex SL (the high-level structure for ISO management systems standards).

We continued our contribution to the new ISO Corporate Governance guide, ISO 37000, through our liaison status, promoting the value of the operational management systems in delivering corporate strategy and policy. This ISO guide will be published in 2021.

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Report
The 2021 Edition Annex SL Briefing Note
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Recognising the importance of standards to the profession, but also the breadth of standards our members use, we completed a survey of member needs and expectations. We are implementing our proposal for the renewed purpose, scope and activities of the CQI’s sponsored standards work in early 2021. Our aim is to have the right consultation and communication processes, to get the right people in the right forums, and to generate value for members.

| 24 | Annual Report 2020 | Trustees’ report

“Our 2020 awards series, which received 107 entries from 23 countries, continued to shine a light on the positive impact that quality management and the global quality profession have on organisational performance”

Strategic theme 4 – Broaden the scope of the profession

Gain the support of allied professions in delivering excellence in governance, assurance and improvement

Key 2020 Projects

• World Quality Day 2020 Campaign – delivered

• CQI International Awards – delivered

• Establish target allied professions for engagement – not delivered

We made limited progress in this area as COVID-19 focused our attention and allied professional bodies on our pandemic responses.

CQI International Quality Awards

These awards are designed to recognise and promote excellence in the quality profession and the strategic value of quality management to society.

Our 2020 awards series, which received 107 entries from 23 countries, continued to shine a light on the positive impact that quality management and the global quality profession have on organisational performance. Given the circumstances surrounding the pandemic, we delivered our awards event virtually. This had the added benefit of including many more people in the event, with attendees from around the world.

We would like to take this opportunity to thank our judging panels, without whom the awards simply could not have taken place. Our thanks also go to our Headline Partner, UKAS, who supported us through the shift to an online ceremony.

Trustees’ report[|] Annual Report 2020[|] 25[|]

In the months leading up to the event, we teamed up with finalists and winners of our 2019 awards to host a series of Learning from Excellence webinars. These interactive events allowed us to share stories, achievements and good practice in quality management.

To encourage further the learning from our awards, we will publish case studies in 2021 from our 2020 award finalists and winners.

The winners from the 2020 International Quality Awards were:

• Emerging talent: John Jack, LifeScan

• Audit system: Qatargas

• Improvement system: TOFAŞ

• Quality professional of the year: David Anderson, BAM Nuttall

• Quality team of the year: Ministry of Defence, Defence Equipment and Support Team

• Quality organisation of the year (SME): Capella

• Quality organisation of the year (Large): Jacobs

• Volunteer of the year: Suzanne Hill

• Outstanding contribution of the year: Professor Jiju Antony

• Outstanding contribution of the year: Quality Practitioner Apprenticeship Trailblazer Team

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11k 1.5k
unique web page views logo and toolkit downloads
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World Quality Day 2020

World Quality Day (WQD) is an annual campaign that gives the CQI and the profession the opportunity to promote quality management within industry, organisations and to the public. The 2020 WQD theme ‘Creating Customer Value’ celebrated the central role that quality management and professionals working within it play in helping organisations to understand and, increasingly, collaborate with customers to create value. During the campaign, we received almost 11,000 unique web page views, over 1.5k logo and toolkit downloads, and several hundred social media mentions.

How does quality help create customer value? Get involved quality.org/wqd20

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Age of Inspection – Faults Quality by Design – Planning Zero defects – ‘Right first TQM (Total Quality Six Sigma – Improving processes to
found in the factory, avoiding quality into product design. Process time’ means there is no Management) – Improvement produce a high proportion of output
failure at the point of use. creates customer-driven features. allowable number of errors of performance in all functions, within specification, eliminating
built into a product or process. departments and processes. defects and reducing variation.
Change management – Agile manifesto – People over The Competency Framework – Recognition of customers as a Development of organisational
Collaboration between all process, working solutions over Sustainable delivery of high-quality key quality stakeholder – The quality culture – Quality is at
employees, from entry- documentation, adaptability over products and services requires consideration of interested parties as the core of culture and strategy,
level to top-management. plan, collaboration over contract. effective systems of governance and a cornerstone of quality management and customer value is central to
assurance, and commitment to a system design and deployment. achieving business goals.
culture of continuous improvement.
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Trustees’ report[|] Annual Report 2020[|] 27[|]

“In 2019, the CQI renewed its relationship with European Organisation for Quality (EOQ)”

Strategic theme 5 – Grow global influence

Become more actively involved in quality communities around the world, recognising the complex environments in which members operate

2020 projects

• Rejoin the European Organisation for Quality – delivered

• Support the UK Quality Infrastructure approach to Quality 4.0 – not delivered

We made limited progress in this area as COVID-19 focused our attention and that of the UK and global quality community on our pandemic responses.

In 2020, the CQI renewed its membership of the European Organisation for Quality (EOQ), recognising value in working with peer national quality bodies on the shared challenges for quality management and the quality profession. This proved to be valuable in 2021 as EOQ members contributed to the CQI’s Quality 4.0 research project and provided a vehicle for the CQI to share its research outputs within the European and global quality community.

We continued to represent the profession with the UK Quality Infrastructure through our role on the UKAS Policy Advisory Committee and Forum, with a focus in 2020 on supporting the shift to remote assessment in the test, inspection and conformity assessment sector.

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£303k 2019

Net income surplus before gains and losses

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£64k
2020
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Financial Performance

The group achieved a breakeven operating result in 2020: £64k net income before gains and losses (2019: £303k). This is an exceptional outcome considering the loss of income directly resulting from the pandemic and was due to a highly effective cost and resource management strategy that underpinned the executive’s response to the challenges of 2020.

The area of the business worst hit was the Learning and Development offering, with revenues suffering particularly badly in the second quarter of 2020. However, ATPs were still able to deliver training to nearly 53,000 delegates by the end of the year, generating £1.32m income. Limiting the decline in income by only 30% is considered a good result.

Membership income increased slightly to £3.17m (2019: £3.14m) due to a modest increase in membership numbers, offset by a decline in some ancillary membership revenue streams.

With the absence of a physical International Quality Awards event, income from awareness activities declined in 2020 and accounted for a modest £15k.

The results include figures from two wholly owned trading subsidiaries. IRCA Japan KK weathered the COVID-19 storm admirably, limiting overall income decline to only 3% and allowing the delivery of a strong royalty payment to the Institute of £0.19m. Following the decision to move the staging of the International Quality Awards, delivered digitally for the first time, into the charitable entity in 2020, activity in CQI Services Limited in 2020 was limited to advertising and sponsorship. The resulting income was therefore low at £55k. Overall, there was a small loss in the entity, and therefore no Gift Aid payment for the year.

Group reserves were maintained at £3.3m in 2020 (2019: £3.3m). Net assets include an investment portfolio valued at £1.6m at the year end and a cash balance of £2.6m.

Having reviewed the financial position, taking into consideration the potential financial implications of the COVID-19 pandemic (see risk management section), the Trustees are confident that the Institute has adequate resources to continue its activities for the foreseeable future. Accordingly, they continue to adopt a going concern basis in preparing the financial statements.

Trustees’ report[|] Annual Report 2020[|] 29[|]

£2.6m cash balance

£3.31m unrestricted reserves

£1.9m free reserves

Investment policy and performance

The CQI operates a low-risk investment policy designed to deliver income while protecting the investment funds over the longer term. This is consistent with the provisions of the Royal Charter.

The high levels of volatility and continuing UK political change, combined with global political and economic uncertainty, resulted in a challenging environment in which to manage investments. The Institute is a long-term investor, and the value of its investments remains significantly above its original investment.

Funds are invested in a Common Investment Fund (CIF), the Newton Global Growth and Income Fund for Charities, which invests within environmental, social and governance policies. This investment fund suffered a small loss and slightly reduced level of dividend income in 2020. The balance of cash held by the Group has increased to £2.6m at the end of 2020 due to improved cash generation from operating activities.

The Finance and Remuneration Committee is responsible for reviewing investment performance and policy, considers the cash holding in individual institutions and manages this risk actively by ensuring the Institute is not over-committed to any one entity. The investment policy was reviewed during the year and deemed fit for purpose by the Board.

Reserves policy

The Institute operates a reserves policy that requires a minimum of three months of budgeted annual operating costs to be retained as free reserves. The Trustees consider that this level will provide sufficient funds to respond to any unexpected events.

The balance held as unrestricted reserves at 31 December 2020 was £3.31m. £1.9m of this was regarded as free reserves, after allowing for funds tied up in fixed assets (£0.4m) and other designated reserves, including funds for IT projects (£0.2m), product development (£0.3m) and a premises reserve (£0.3m) for office relocation costs. £1.9m equates to over five months’ worth of budgeted 2021 operating costs, which was comfortably more than the minimum requirement of three months.

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£1.9m
free reserves
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Risk Management

Good risk management is fundamental to the continued work and sustainability of the Institute. We identify and manage risks that could adversely impact the achievement of our strategic purpose and determine the calculated risks we need to take to succeed.

The Institute operates a formal framework for the management of risk, taking the view that risk can be positive (opportunity) or negative (threat). The Institute maintains a risk register incorporating strategic, operational and compliance risks that are informed by its strategic objectives, performance, voice of its stakeholders, regulatory environment and analysis of the external environment.

The Board delegates day-to-day responsibility for risk management to the Senior Management Team, who are responsible for identifying and evaluating risks that relate to their areas and activities, implementing appropriate controls, and for ongoing monitoring.

The Governance and Risk Committee reviews the management of risk in detail at each meeting and the Board reviews the Institute’s strategic and compliance risks and the associated project portfolio at each Board meeting.

Trustees’ report[|] Annual Report 2020[|] 31[|]

“The Board immediately agreed a riskbased focus to its activities and those of its subcommittees, focusing on the principles of safety, customer value and financial sustainability. ”

Key business risks and mitigations

The Board considers that the key strategic threats landscape for the Institute are as follows and has approved the subsequent responses to threats.

In early 2020, the COVID-19 pandemic emerged and was recognised by the Board as a key long-term risk to the sustainability of the CQI and our ability to invest in our 2030 strategy.

The Board immediately agreed a risk-based focus to its activities and those of its subcommittees, focusing on the principles of safety, customer value and financial sustainability. An important part of the approach was to provide the necessary oversight and support of the executive team but remove unnecessary activity that might otherwise distract the Trustees and executive.

The CQI implemented a three-phase response as described on page 10 (Phase 1 Stabilise, Phase 2 Adapt, and Phase 3 Recover). Close monitoring of CQI performance and the external COVID-19 environment was undertaken with the Finance and Remuneration Committee (FRC) focusing on financial sustainability; the Governance and Risk Committee (GRC) focusing on operational and compliance risk; and the Board having overall responsibility for plans while maintaining appropriate reserves as per the risk response below.

Having successfully worked through the Stabilise and Adapt phases in 2020 (see pandemic response on page 10 above), and achieved good outcomes to the principles of safety, customer value and financial sustainability, the Board has turned its attention to the Recover phase in 2021.

The most severe financial impact of the pandemic is recognised to be on revenues from CQI|IRCA certified training courses, which saw a 30% reduction on budget. Professional recognition gained through membership can be countercyclical in times of economic turmoil as individuals seek to maximise employability. We were conscious that membership can be discretionary for individuals but important for employers who subsidise this.

For these reasons, the Board agreed that new capital investment spend, new recruitment and staff salary increments would be placed on hold until the Institute has completed its 2021 CQI membership renewals and until we have confidence that we will achieve the 2021 financial operating outturn. The Board also approved a policy of holding membership fees at the 2021 level for members that renewed early and the active promotion of concessionary fees to support individuals temporarily in difficult circumstances. This fair and prudent approach ensures the financial sustainability of the Institute, and also provided an opportunity for the Board to complete a strategy review to assess changes in our operating environment and to what extent we need to adapt our strategy.

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This strategy review was conducted in the first quarter of 2021. In summary:

The external context

We found that the events of 2020 accelerated and accentuated the four key trends on which the Institute’s strategy is based (see page 8 above). 2020 saw significant shifts in the adoption of technology, changes in how organisations think about resilience in complex global supply chains, and an increased focus on sustainability issues, from environment to ethical supply chains.

All of this reinforced the risk to the relevance of the profession (noted in the table on next page) and underlined the importance of our Lead Quality Management Practice and Broaden the Scope strategic themes.

The internal context

Our 2020 experience increased customer and partner expectations and acceptance of digital services and content. We learned more about the value and limitations of remote working, both through our own experience and working with members, volunteers and partners. We recognised that the external environment required a shift in focus for our marketing strategy and growth. Finally, we have assumed that our revenues from certified training courses will not recover until 2023 and that the effects of COVID-19 on face-to-face training will mean a greater emphasis on remote learning and assessment.

Again, changes in our internal context had an impact on the professional body relevance risk (noted in the table on next page) and underlined the importance of our Redesign Offerings and Align Operating Model strategic themes. In response, we have decided to bring forward our plans from later in our strategic roadmap to enhance our digital content offering and introduce an online learning service. This will create value for customers and new revenue for the Institute. We will also use our office relocation as an opportunity to adapt to new ways of agile and flexible working that will benefit the CQI, colleagues and volunteers.

Trustees’ report[|] Annual Report 2020[|] 33[|]

“The Board has conducted a strategy review to adapt the Institute’s plans and activity to the COVID-19 shift”

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Risk: Short term Risk Response
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Risk: Short term	Risk Response
Pandemic •Realised risk of COVID-19’s impact on the CQI’s fnancial viability and customer contexts. •Opportunity to adapt ways of working and provide increased value for colleagues and customers.	•The Board, via its Finance and Remuneration Committee, monitors and adapts fnancial scenarios to operational and fnancial viability. It also adapts fnancial plans and controls to maintain our sustainability and reserves policy. •The Board has conducted a strategy review to adapt the Institute’s plans and activity to the COVID-19 shift
Brexit •Threat to CQI people resources (staff with an EU passport). •Impact on individuals and organisations managing quality in global supply chains.	•The CQI has supported colleagues with an EU passport to maintain their ability to work in the UK in line with UK government policy. •We also continue to provide information and guidance to members on the UK-EU trade deal, especially on conformity assessment, test and inspection.

| 34 | Annual Report 2020 | Trustees’ report

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Risk: Long term Risk Response
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Risk: Long term	Risk Response
Professional Body Relevance •Threat of a rapidly changing external global environment compromising the relevance of professional bodies including the CQI. •Opportunity to position the CQI as the trusted provider of professional standards and content in our quality domain.	•The CQI has developed processes and plans to deliver the programme defned under the Redesign Offerings strategic theme. This will improve the value of services to professionals and organisations and support them in their approach to quality management. Our marketing plan will underline this.
Relevance of the Profession •Threat that the fast-changing and volatile external environment reduces the relevance of the profession. •Opportunity to provide value to organisations and society in the spheres of Industry 4.0 and sustainability.	•The CQI has developed processes and plans to deliver the programme defned under the Lead Quality Management and Broaden the Scope strategic themes. This will develop and promote the value of quality management in tackling external trends, and attract new, diverse talent into the profession. Our marketing plan will underline this.
Scope of Membership Opportunity •The opportunity to attract new customers including specialist quality practitioners (such as business improvement), new sector domains (such as public sector) and global markets. •The threat of an aging demographic, which will reduce availability of skills required by industry over time.	•The COVID-19 shift has changed the market environment and the CQI is reframing its marketing focus and plans as part of the 2021 strategy review. •The CQI has established an equality, diversity and inclusion initiative to drive diversity in the profession to help attract and develop the new skills and experience the industry needs.

Trustees’ report[|] Annual Report 2020[|] 35[|]

“At the time of writing this report, the COVID-19 pandemic remains ongoing, and will have an impact on our performance in 2021”

Future plans

Our future plans are driven by the CQI’s 2020–30 Strategy set out on pages 8–9. As a result of the strategy review, we have adapted our Phase 1 plan (prepare for growth) as follows:

• Continue our development of CQI core professional assets (competence framework; learning; professional recognitions; CPD) with respect to the emergent Quality 4.0 agenda, but addressing in addition the role of quality management to the sustainability agenda.

• Accelerate our development of digital accessibility to our core services (career support; content; assessment; networking) completed and digitally accessible.

• Bring forward a new e-learning service as a new revenue stream and as value for members’ CPD.

Green are new additions for Phase 1, brought forwards from Phase 2:

Phase 1: Prepare – 2020–2022

Phase 1: Prepare – 2020–2022	Phase 1: Prepare – 2020–2022
Align operating model	•Update our core CRM to improve systems integration, customer experience and accessibility, irrespective of location. •Adapt new agile ways of working in a new London offce focused on our purpose, values and strategy deployment at pace. •Introduce a new online learning offer that has created a proftable new revenue stream, subject to business case. •Establish clear focus on the market segments we wish to pursue for 2021 and Phase 2 and associated marcoms plans.
Redesign offerings	•Introduce an online portal for individuals and employers to understand and assess QM knowledge, skills and behaviours (linking to L&D and CPD). •Introduce an accessible Chartered Quality Professional qualifcation (in addition to apprenticeships and training). •Move all training course examinations online. •Introduce a superior, trusted online content offer covering global thought leadership, industry news and case studies. •Expand our range of member-led branch and special interest networks to include core communities of practice to meet current member needs and emergent practices.

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Phase 1: Prepare – 2020–2022

Phase 1: Prepare – 2020–2022	Phase 1: Prepare – 2020–2022
Lead quality management practice	•Defne the value of quality management in supporting the emerging technologyand sustainability agendasand the nature of change required in the quality management practice. •Complete Q4.0, Competence Framework review and career path research and input to potential qualifcation design. •Support our members through the next ISO review of core management systems standards.
Broaden the scope of the profession	•Develop case studies that demonstrate the societal and competitive value of QM and the QP via our international awards. •Establish the value of quality management in supporting the emerging technology and sustainability agendas with key related bodies. •Identify the sector/disciplines we wish to engage with to create value for the CQI and members.
Grow global perspective	•Collaborate with EOQ and global quality assortations on the development and promotion of quality practice. •Grow the CQI’s contribution to the UK Quality Infrastructure. •Establish a clear position on the proposed ISO 9001 revision.

Trustees’ report[|] Annual Report 2020[|] 37[|]

STRUCTURE, GOVERNANCE

AND MANAGEMENT

Charitable status and administrative details

The Institute is a registered charity (no. 259678) under the Charities Act 2011 and its expenditure is directed in furtherance of its charitable objects. The Institute was granted a Royal Charter on 23 November 2006. Its registered office is as shown on page 44. The current Trustees, and any past Trustees who served during the year, are listed on page 80, with the names of the senior executive staff and the external advisers of the charity on page 82.

Board of Trustees

The Trustees, as members of the Board, are the directors of the Institute and the Trustees of the charity. The Trustees are accountable to the Charity Commission and to CQI members.

Statement of Trustees’ Responsibilities

The Trustees are responsible for preparing this Trustees’ Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). The law, applicable to charities in England and Wales, requires the Trustees to prepare financial statements for each financial year that give a true and fair view of the state of affairs of the group and charity, and of the net movement in funds of the group and charity for that period. In preparing these financial statements, the Trustees are required to:

• Select suitable accounting policies and then apply them consistently;

• Observe the methods and principles in the Charities Statement of Recommended Practice;

• Make judgements and estimates that are reasonable and prudent;

• State whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and charity will continue in operation.

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“The Trustees are responsible for approving and directing overall group strategy, major capital projects, budgets, financial control and risk management.”

The Trustees are responsible for keeping proper accounting records that disclose, with reasonable accuracy, at any time the financial position of the group and charity, and enable them to ensure that the financial statements comply with the Charities Act 2011, the applicable Charities (Accounts and Reports) Regulations and the provisions of the Royal Charter.

The Trustees are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

So far as each of the Trustees is aware at the time of the report:

• There is no relevant audit information of which the charity and the group’s auditors are unaware; and

• The Trustees have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The Trustees are responsible for the maintenance and integrity of the group and charity’s financial information included on the charity’s website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements.

The Trustees are responsible for approving and directing overall group strategy, major capital projects, budgets, financial control and risk management.

The Trustees are responsible for directing the Institute’s activities and for overseeing the management of the affairs of the Institute; they delegate day-to-day management of the organisation to the chief executive and the senior management team. The Board acts on advice and information from regular meetings with the chief executive and senior management team. The Board reviews operational performance regularly to satisfy itself that the activities of the Institute are in accordance with the agreed strategic direction and ensures that the executive management has the capacity and resources to meet the Institute’s objectives. The Board meets four times a year and is provided with a monthly written report from the CEO.

Trustees’ report[|] Annual Report 2020[|] 39[|]

“To drive the improvement of inclusion within the CQI and the profession, the Board established a working group in March 2020”

Board effectiveness

The Board uses the ACEVO Charity Governance Code as the standard it measures itself against. The Board reviewed status against this code in December 2020 and the analysis below shows good progress since the first review in 2018.

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Charity Governance Code Principle 2018 2020
1. Organisational Purpose
2. Leadership
3. Integrity
4. Decision making, risk and control
5. Board effectiveness
6. Diversity
7. Openness and accountability
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Green – Good practice in place, reviewed and improved Yellow – Good practice in place, but requires improvement Red – Good practice absent

Diversity – During the development of the CQI’s 2020–30 Strategy, the Board approved a vision for the quality profession that includes the need for diversity and “to embrace wider scopes of experience, skills and backgrounds to deliver its wider breadth and new roles”. To drive the improvement of inclusion within the CQI and the profession, the Board established a working group in March 2020 to establish a diversity and inclusion policy, and importantly, a structured deployment plan. The CQI equality, diversity and inclusion (EDI) policy was approved by the Board in March 2021 and will now be deployed.

Note: The Charity Code was updated in 2020 with the diversity principle expanded to EDI and the integrity principle expanded to emphasise safeguarding. These changes will be considered in the next review by the Governance and Risk Committee.

| 40 | Annual Report 2020 | Trustees’ report

Board Composition

The composition of the Board is set out on page 80. New Trustees complete an induction programme covering Trustee responsibilities as well as the Institute strategy and objectives, and periodic refresher training is provided.

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2020
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Board effectiveness is reviewed after each meeting by the Board, and individual Trustee and CEO performance is reviewed annually by the chair. The Board agenda is built around the CQI strategy so that Trustees steer direction based on an understanding of risk, performance and external developments.

The current Chair of the Board of Trustees, Ian Mitchell, comes to the end of his term at the September 2021 AGM. In December 2020, the Board agreed a process for the election of a new chair in line with the Board terms of reference and Amanda McKay was elected by the Trustees to take the position after the AGM.

Trustees’ report[|] Annual Report 2020[|] 41[|]

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Mean gender
pay gap
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The Board and its Committees

The Membership Council and Nominating Committee

The charter and byelaws grant specific powers and duties to an Advisory Council of the Institute to elect up to 17 Trustees through the CQI Nominating Committee.

The CQI Membership Council fulfils the role of the Advisory Council appointing new Trustees based on recommendations from the CQI Nominating Committee, which comprises members from the Board and Membership Council. In addition, the Membership Council operates and supports the CQI’s professional networks of regions, branches and special interest groups.

Finance and Remuneration Committee

The Finance and Remuneration Committee (FRC) is drawn from members of the Board and ensures the system of internal control is satisfactory to deliver regulatory compliance, financial probity and value for money. This includes reviewing and challenging financial plans; reviewing budgets and financial statements; overseeing the annual financial audit; reviewing investment policy and performance; and reviewing the reserves policy and staff remuneration.

Governance and Risk Committee

The Governance and Risk Committee (GRC) is drawn from members of the Board and ensures the corporate governance and risk management systems support the CQI’s purpose and strategy through the CQI’s Framework for the Management of Corporate Governance and Framework for the Management of Risk.

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April 2020 19%
Mean gender
pay gap April 2021 19%
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Remuneration policy

The Institute’s policy is to position its overall reward package at market rate for membership bodies of a similar size, and to encourage and enable individual progression and career development of staff. Recruitment and reward are based on potential and performance only, with policies and training in place to ensure no discriminatory factors are involved.

The FRC undertakes an annual salary review that takes into account the financial status of the Institute, cost of living and market rates. Once approved by the Board, changes are applied to all employees, at all levels, including key management personnel. In addition, individual salary increases may be offered during the year, following a business case process that looks at performance against objectives (including behavioural) and changes in scope. For 2021, it was agreed that the staff salary increment would only be granted if the Institute achieved the 2021 operating budget outturn and after completion of CQI membership renewals. This was communicated to staff and we are grateful for their understanding.

The Institute has decided to participate in the Voluntary Gender Equality Reporting Initiative. Calculated in April 2021, the CQI’s gender pay gap is 19% (April 2020: 19%). The pay gap indicates that while two thirds of employees are women, the majority of men are in management roles and therefore in the upper quartile pay band. The Institute employs a large number of women in each of the quartile pay bands. The proportion of men to women in our workforce has gone from 36%–64% in 2020 to 43%–57% in 2021.

The CQI strongly supports equal pay, with individuals carrying out the same role being paid the same, irrespective of gender. Our salaries are benchmarked at market and internal rate. We are open to, and encourage, flexible and part-time working and we promote internal job mobility where possible. The FRC will continue to monitor equal pay and diversity within the context of remuneration.

Trustees’ report[|] Annual Report 2020[|] 43[|]

Men

Women

The proportion of men to women in our workforce

2020 2021

Group structure

The charity has two active, wholly owned, subsidiary companies.

IRCA Japan Kabushiki Kaisha is a company registered in Japan. Its principal activity is to provide membership services to our members in Japan and to promote the Institute’s auditor certification services offered in Japan.

CQI Services Limited is registered in the UK under company registration number 4572473. The company’s principal activities relate to securing advertising in the Institute members’ magazine and helping members find new jobs through www.QualityJobs.org.

Financial statements

The financial statements have been prepared in accordance with the accounting policies set out in note 1 to the accounts and comply with the Institute’s Royal Charter, the Charities Act 2011 and Accounting and Reporting by Charities Statement of Recommended Practice (revised 2015) (Second Edition, effective 1 January 2019) applicable to charities preparing their accounts in accordance with the Financial Reporting Standard for the UK and Republic of Ireland (FRS 102).

The Institute does not generate income through fundraising; therefore, is not in breach of the Information Commissioner’s Office’s requirements with regard to fundraising.

By order of the Board of Trustees,

Ian Mitchell

Chair, Chair of the Board of Trustees, Chartered Quality Institute

Date: 9 June 2021

| 44 | Annual Report 2020 | Trustees’ report

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2020
2021
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Independent auditor’s report to the Trustees of the Chartered Quality Institute

Opinion

We have audited the financial statements of Chartered Quality Institute for the year ended 31 December 2020, which comprise the Consolidated Statement of Financial Activities, the Balance Sheet and the Consolidated Statement of Cash Flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

• give a true and fair view of the state of the group’s and of the parent charity’s affairs as at 31 December 2020 and of the group’s net movement in funds for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Charities Act 2011.

Basis for opinion

We have been appointed as auditor under section 144 of the Charities Act 2011 and report in accordance with the Act and relevant regulations made or having effect thereunder. We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs [UK]) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the Trustees’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the [group/charity]’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the Trustees with respect to going concern are described in the relevant sections of this report.

Independent auditor’s report[|] Annual Report 2020[|] 45[|]

Other information

The Trustees are responsible for the other information. The other information comprises the information included in the Trustees’ Annual Report and the Chair’s statement. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Charities (Accounts and Reports) Regulations 2008 require us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent charity, or

• sufficient accounting records have not been kept; or

• the parent charity financial statements are not in agreement with the accounting records and returns; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of Trustees for the financial statements

As explained more fully in the Trustees’ responsibilities statement set out on page 36, the Trustees are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Trustees determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Trustees are responsible for assessing the group’s and the parent charity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Trustees either intend to liquidate the group or the parent charity or to cease operations, or have no realistic alternative but to do so.

| 46 | Annual Report 2020 | Independent auditor’s report

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud. is detailed below.

Based on our understanding of the group and the environment in which it operates, we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the preparation of the financial statements, such as the Charities Act 2011, the Charity’s Royal Charter, payroll tax and sales tax.

We evaluated management’s incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls). Audit procedures performed by the engagement team included:

• Inspecting correspondence with regulators and tax authorities;

• Discussions with management including consideration of known or suspected instances of non-compliance with laws and regulation and fraud;

• Evaluating management’s controls designed to prevent and detect irregularities;

• Identifying and testing journals, in particular journal entries posted with unusual account combinations, postings by unusual users or with unusual descriptions; and

• Challenging assumptions and judgements made by management in their critical accounting estimates.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Independent auditor’s report[|] Annual Report 2020[|] 47[|]

Use of our report

This report is made solely to the charity’s Trustees, as a body, in accordance with section 144 of the Charities Act 2011 and regulations made under section 154 of that Act. Our audit work has been undertaken so that we might state to the charity’s Trustees those matters we are required to state to them in an Auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity’s Trustees as a body for our audit work, for this report, or for the opinions we have formed.

Haysmacintyre LLP 10 Queen Street Place Statutory Auditors London Date: 10 June 2021 EC4R 1AG

Haysmacintyre LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

----- Start of picture text -----
2020 2019
Note £’000 £’000
Income from:
Charitable activities
Membership Services 3,165 3,141
Learning & Development 1,321 1,905
Awareness 15 87
Investments 3 36 55
Total 4,537 5,188
Expenditure on:
Charitable activities
Membership Services 4 2,605 2,707
Learning & Development 4 1,089 1,331
Awareness 4 779 847
Total 4,473 4,885
Net income before gains/(losses)
64 303
on investments and foreign exchange
Net gain/(loss) on investments 13 (11) 218
Net gain/(loss) on foreign exchange (9) (8)
Net income 44 513
Reconciliation of funds:
Funds brought forward 3,267 2,754
Total unrestricted funds carried forward 20 3,311 3,267
----- End of picture text -----

| 48 | Annual Report 2020 | Independent auditor’s report

Consolidated statement of financial activities for the year ended 31 December 2020

Note 2020 £’000 Income from: Charitable activities Membership Services Learning & Development Awareness 3,165 1,321 15 Investments 3 36	2019 £’000
	3,141 1,905 87
	55
Total 4,537 Expenditure on: Charitable activities Membership Services Learning & Development Awareness 4 4 4 2,605 1,089 779	5,188
	2,707 1,331 847
Total 4,473 Net income before gains/(losses) on investments and foreign exchange 64 Net gain/(loss) on investments Net gain/(loss) on foreign exchange 13 (11) (9)	4,885
	303
	218 (8)
Net income 44 Reconciliation of funds: Funds brought forward 3,267	513
	2,754
Total unrestricted funds carried forward 20 3,311	3,267

There are no recognised gains or losses other than those recognised above. All activities are continuing.

All activities (income and expenditure) in both years are unrestricted and therefore a comparable statement of financial activities is not required.

The notes on pages 52 to 77 form part of these financial statements.

Consolidated statement of financial activities[|] Annual Report 2020[|] 49[|]

Balance sheet as at 31 December 2020

Group Institute Note 2020 £’000 2019 £’000 2020 £’000 2019 £’000 Fixed assets Intangible fxed assets Tangible fxed assets Investments 11 12 13 388 48 1,610 285 41 1,621 378 37 1,691 259 34 1,699	Institute
2,046 1,947 2,106 1,992 Current assets Debtors Cash at bank and in hand 14 759 2,594 947 2,274 870 2,209 1,089 1,882
3,353 3,221 3,079 2,971 Current liabilities Creditors: amounts due within one year 15 2,088 1,822 1,626 1,378
2,088 1,822 1,626 1,378 Net current assets 1,265 1,399 1,453 1,593 Provisions for other liabilities due within one year 17 - 79 - 79
Net assets 3,311 3,267 3,559 3,506
Total funds: General funds Designated funds 20 20 1,919 1,392 2,007 1,260 2,187 1,372 2,280 1,226
Total unrestricted funds 3,311 3,267 3,559 3,506

These accounts were approved by the Board and authorised for issue on 9 June 2021 and were signed on its behalf by:

Ian Mitchell, Chair

The notes on pages 52 to 77 form part of these financial statements.

| 50 | Annual Report 2020 | Balance sheet

Consolidated statement of cash flows for the year ended 31 December 2020

Note 2020 £’000 Cash fows from operating activities: Net cash provided by operating activities 593	2019 £’000
	317
Cash fow from investing activities: Dividends and interest from investments Spend on internally generated intangible assets Purchase of tangible assets 36 (252) (47)	55 (143) (9)
Net cash provided by/(used in) investing activities (263)	(97)
Change in cash and cash equivalents in the reporting period 330 Cash and cash equivalents at beginning of reporting period Exchange gains/(losses) on cash and cash equivalents 2,274 (9)
	220
	2,062 (8)
Cash and cash equivalents at end of reporting period 2,595	2,274
Reconciliation of net income to net cash fow from operating activities Net income for the reporting period (as per the statement of fnancial activities) Adjustments for: Depreciation charges Amortisation charges (Gains)/losses on investments (Gains)/losses on exchange Dividends and interest from investments Increase/(decrease) in provisions (Increase)/decrease in debtors Increase/(decrease) in creditors 44 40 149 11 9 (36) (79) 186 269
	513 140 70 (218) 8 (55) - (78) (63)
Net cash provided by operating activities 593	317
Analysis of cash and cash equivalents Cash at bank and in hand Short term deposits 1,361 1,233
	897 1,377
Total cash and cash equivalents 22 2,594	2,274

The notes on pages 52 to 77 form part of these financial statements.

Consolidated statement of cash flows[|] Annual Report 2020[|] 51[|]

Notes to the financial statements

1. Accounting policies

The principle accounting policies adopted, judgements and key sources of estimation uncertainty in the preparation of the financial statements are as follows:

Basis of preparation

The financial statements are prepared on a going concern basis, under the historical cost convention modified to include the recognition of listed investments measured at fair value, which is consistent with the prior year. The financial statements have been prepared in accordance with the Statement of Recommended Practice: Accounting and Reporting by Charities (“The SORP”), the Financial Reporting Standard applicable in the United Kingdom and Republic of Ireland (FRS 102) and the Charities Act 2011.

The Chartered Quality Institute (“The Institute”) meets the definition of a public benefit entity under FRS 102.

General information

The Institute is a charity registered in England and Wales (charity number 259678). The Institute’s registered office address is Third floor, 90 Chancery Lane, Holborn, London WC2A 1EU.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group and Institutes accounting policies. In the application of the accounting policies, Trustees are required to make judgements, estimates, and assumptions about the carrying value of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affected current and future periods.

In the view of the Trustees, no assumptions concerning the future or estimation uncertainty affecting assets or liabilities at the balance sheet date are likely to result in a material adjustment to their carrying amounts in the next financial year.

Basis of consolidation

The Group accounts include the results of the Institute’s subsidiaries: CQI Services Ltd and the International Register of Certificated Auditors Japan Kabushiki Kaisha (“IRCA Japan KK”). A subsidiary is an entity controlled by the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The subsidiaries comply with the same accounting policies as the Institute and have been consolidated on a line-by-line basis. All intra-Group transactions, balances, income and expenses are eliminated on consolidation.

| 52 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

The Institute has taken advantage of the exemption from the SORP FRS 102 from disclosing its individual statement of financial activities. The gross income of the Institute for the year was £4.04m (2019: £4.73m) and its result for the year was a net income surplus of £53k (2019: £522k).

Foreign currency

i) Functional and presentation currency

The group financial statements are presented in pound sterling and rounded to thousands. The Institute’s functional and presentation currency is the pound sterling.

ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rate at transaction date. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate ruling at balance sheet date. Differences are taken to the income and expenditure account.

iii) Translation

The trading results of Group undertakings are translated into sterling at the average exchange rates for the year. The assets and liabilities of overseas undertakings are translated at the exchange rates ruling at the year-end.

Going concern

The Trustees continue to monitor the changing landscape resulting from the COVID-19 pandemic and its impact on the Group’s financials through scenario planning, monthly review of results against budgets, and regular review of assumptions. The Group holds a significant portion of its reserves as cash, has a strong level of free reserves and has been able to adjust its cost base to adapt to the reductions in revenue; therefore the Trustees are of the view that the Institute and Group are a going concern.

Income

All income is recognised once the Institute and Group has entitlement to income, it is probable that income will be received and the amount of income receivable can be measured reliably. Income of the Institute is, where applicable, included net of Value Added Tax (VAT) and is allocated to the period to which it relates, carrying forward that part of the income relating to future accounting periods. Income received relating to future accounting periods is deferred and recognised as a creditor within the balance sheet.

Member subscription income is recognised over the period to which the subscription relates and over which the membership services and benefits are provided. Where the subscription spans more than one financial year, the income received but not earned in the current financial year is deferred into the next.

Income from all other charitable activities is recognised as earned as the related services are provided.

Notes to the financial statements[|] Annual Report 2020[|] 53[|]

Notes to the financial statements

Income from other trading activities is recognised as earned as the related goods are provided.

Investment income is recognised on a receivable basis and the amounts can be measured reliably.

Dividends are recognised once the dividend has been declared and notification has been received that the dividends are due.

Expenditure

Liabilities are recognised as expenditure as soon as there is legal or constructive obligation committing the Institute and Group to that expenditure, it is probable that settlement will be required and the amount of obligation can be measured reliably. Expenditure is recognised on an accruals basis as a liability is incurred, inclusive of VAT, which cannot be recovered.

All of the Institute’s expenditure is classified as expenditure on charitable activities and allocated between activity streams. Expenditure is allocated to the particular activity where the cost relates directly to that activity. The cost of overall direction and administration of each activity, known as “support costs” and comprising the salary and overhead costs of the central function, is apportioned based on staff time attributable to each activity.

Support costs also include governance costs, which comprise organisational administration and compliance with constitutional and statutory requirements. The allocation of support and governance costs is analysed in notes 5 and 6.

Employee benefits

Short-term benefits including holiday pay are recognised as an expense in the period in which the service is received.

Termination benefits are accounted for on an accrual basis and in line with FRS 102.

The Institute contributes to Group personal pension schemes, the assets of which are administered by Aviva, and Suffolk Life. They are defined contribution schemes. All contributed costs are accounted for on the basis of charging the cost of providing pensions over the period when the Institute and Group benefits from the employees’ services. The Institute and Group has no further liability under the scheme.

Leasing and hire purchase commitments

Rentals paid under operating leases are charged to the income and expenditure account on a straight-line basis over the lease term. The Institute holds no assets under finance leases or hire purchase contracts.

| 54 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

Intangible fixed assets

Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Amortisation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their estimated useful lives, as follows:

• Product development – 3 to 5 years

• Intellectual property – 3 to 5 years

Where factors, such as changes in market demand or price, indicate that residual value or useful life have changed, the residual value, useful life or amortisation rate are amended prospectively to reflect the new circumstances. The assets are reviewed for impairment if the above factors indicate that the carrying amount may be impaired.

Development costs that are directly attributable to the design and testing of identifiable and unique products controlled by the Group are recognised as intangible assets when the following criteria are met:

• it is technically feasible to complete the product so that it will be available for use;

• management intends to complete the product and use or sell it;

• there is an ability to use or sell the product;

• it can be demonstrated how the product will generate probable future economic benefits;

• adequate technical, financial and other resources to complete the development and to use or sell the product are available; and

• the expenditure attributable to the product during its development can be reliably measured.

Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Tangible fixed assets

Tangible assets are stated at cost (or deemed cost) less accumulated depreciation and accumulated impairment losses. Cost includes the original purchase price, costs directly attributable to bringing the asset to its working condition for its intended use, dismantling and restoration costs. The minimum threshold for capitalisation is £1,000. Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life:

• Improvements to premises – over the term of the lease

• Office equipment and furniture – 5 years

• Computer equipment and software – 3 years

Notes to the financial statements[|] Annual Report 2020[|] 55[|]

Notes to the financial statements

Investments

Investments are a form of basic financial instrument and are initially shown in the financial statements at fair value. Movements in the fair values of investments are shown as net gains and losses in the Statement of Financial Activities.

Profits and losses on the realisation of investments are shown as realised gains and losses in the Statement of Financial Activities. Net gains and losses on investments are calculated between sales proceeds and their opening carrying values or their purchase value if acquired subsequent to the first day of the financial year. Unrealised gains and losses are calculated as the difference between the fair value at the year end and their carrying value. Realised and unrealised investment gains and losses are combined in the Statement of Financial Activities.

Financial instruments

The Group has chosen to adopt Section 11 of FRS 102 in respect of financial instruments.

i) Financial assets

Basic financial assets, including trade and other receivables, cash and bank balances, are initially recognised at transaction value and subsequently measured at amortised cost. Other financial assets, including investments, are initially measured at fair value. Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party or (c) despite having retained some significant risks and rewards of ownership, control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.

Cash at bank and cash in hand includes cash and short-term highly liquid investments with a short maturity of three months or less from the date of acquisition or opening of the deposit or similar account. A specific provision is made for debts for which recoverability is in doubt.

ii) Financial liabilities

Basic financial liabilities, including trade and other payables, are initially recognised at transaction price. Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Financial liabilities held at amortised cost comprise all creditors except social security and other taxes and provisions.

iii) Offsetting

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

| 56 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

Provisions

Provisions are recognised where the Institute has a present legal or constructive obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Provisions are measured at the present value or the expenditures expected to be required to settle the obligation.

Fund accounting

Unrestricted funds are those funds available to the Institute and Group for its general purposes. They include funds designated (Note 20) by the Trustees for particular purposes where their use remains at the discretion of the Trustees. It is the policy of the Trustees to retain in unrestricted funds amounts that in their judgement can help to mitigate the short-term effects of income volatility; and retain as long-term investment funds to generate sufficient income to meet current and future operational activities of the charity. The Group does not hold any restricted funds. Further information is available in the reserves section of the Trustees’ report.

2. Trading activities of subsidiary undertakings

The Institute has two wholly-owned trading subsidiaries. A summary of their trading results is shown on page 58.

CQI Services Limited is incorporated in England and Wales, registered number 04572473. Its registered office is 90 Chancery Lane, London WC2A 1EU. The principal activity of the company is the generation of advertising revenue placed in the Institute’s members’ magazine and helping members find new jobs through the Institute’s jobsite. Income and expenditure are included in Membership Services and Awareness in the Group financial statements. Any profits are Gift Aided to the Institute.

IRCA Japan KK is incorporated in Japan, registered number 0100-01-130705. Its registered office is Burex Kojimachi 8F, 3-5-2 Kojimachi, Chiyoda-ku 102-0083 Tokyo, Japan. The principal activity of the company is to provide local marketing, certification and adminstration services to IRCA for its auditors in Japan. The income and expenditure of the company has been included under charitable activities of Membership Services in the Group financial statements. IRCA Japan KK pays an annual royalty to the Institute.

Notes to the financial statements[|] Annual Report 2020[|] 57[|]

Notes to the financial statements

2. Trading activities of subsidiary undertakings (continued)

	CQI Services	IRCA	Total CQI Services IRCA Total
	Limited	Japan KK	Limited Japan KK
	2020	2020	2020 2019 2019 2019
Summary proft & loss accounts:	£’000	£’000	£’000 £’000 £’000 £’000
Turnover	55	645	700 239 661 900
Operating costs	(58)	(450)	(508) (239) (436) (675)
Operating proft	(3)	195	192 - 225 225
Interest receivable	-	-	- - - -
Proft/(loss) on ordinary activities before taxation	(3)	195	192 - 225 225
Taxation	-	(5)	(5) - - -
Proft/(loss) on ordinary activities before taxation	(3)	190	187 - 225 225
Gift Aid/Royalty to parent charity	-	(186)	(186) - (222) (222)
Retained in subsidiary	(3)	4	1 - 3 3
The assets and liabilities of the subsidiaries were:
Current assets	17	534	551 65 527 592
Current liabilities	(62)	(353)	(415) (108) (384) (492)
Total net assets	(45)	181	136 (43) 143 100
Aggregate share capital and reserves	(45)	181	136 (43) 143 100

----- Start of picture text -----
Staff Costs Other direct Support Costs Total
activity costs 2020
£’000 £’000 £’000 £’000
Charitable activities 2020
Membership Services 874 983 748 2,605
Learning & Development 325 479 285 1,089
Awareness 386 215 178 779
Support Costs 840 371 (1,211) -
Total charitable costs 2,425 2,048 - 4,473
----- End of picture text -----

----- Start of picture text -----
Staff Costs Other direct Support Costs Total
activity costs 2019
£’000 £’000 £’000 £’000
Charitable activities 2019
Membership Services 874 1,023 810 2,707
Learning & Development 405 595 331 1,331
Awareness 393 307 147 847
Support Costs 924 364 (1,288) -
Total charitable costs 2,596 2,289 - 4,885
----- End of picture text -----

3. Investment income

2020 £’000 Bank deposit interest and other income Dividend income from shares listed on the London Stock Exchange 4 32	2019 £’000
	11 44
Total 36	55

| 58 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

4. Total expenditure

----- Start of picture text -----
CQI Services IRCA Total
Limited Japan KK
2019 2019 2019
£’000 £’000 £’000
239 661 900
(239) (436) (675)
- 225 225
- - -
- 225 225
- - -
- 225 225
-
(222) (222)
- 3 3
65 527 592
(108) (384) (492)
(43) 143 100
(43) 143 100
----- End of picture text -----

Staff Costs £’000 Other direct activity costs £’000 Support Costs £’000 Total 2020 £’000 Charitable activities 2020 Membership Services Learning & Development Awareness 874 325 386 983 479 215 748 285 178 2,605 1,089 779 Support Costs 840 371 (1,211) -
Total charitable costs 2,425 2,048 - 4,473
Staff Costs £’000 Other direct activity costs £’000 Support Costs £’000 Total 2019 £’000 Charitable activities 2019 Membership Services Learning & Development Awareness 874 405 393 1,023 595 307 810 331 147 2,707 1,331 847 Support Costs 924 364 (1,288) -
Total charitable costs 2,596 2,289 - 4,885

Support costs totalling £1,210,651 (2019: £1,288,618) have been allocated across the activities. These include costs associated with IT, HR, finance, property and other central services across the Group. The costs have been allocated based on time spent by departments supporting the various activities.

----- Start of picture text -----
2019
£’000
11
44
55
----- End of picture text -----

Notes to the financial statements[|] Annual Report 2020[|] 59[|]

Notes to the financial statements

5. Support costs

5. Support costs
Staff Costs £’000 Premises & Offce Costs £’000 Resources £’000 Information Technology £’000 Governance £’000 Total 2020 £’000 Support Costs 2020 Membership Services Learning & Development Awareness 519 198 124 127 48 30 14 5 3 68 26 16 20 8 5 748 285 178
Total support costs 841 205 22 110 33 1,211

Staff Costs £’000 Premises & Offce Costs £’000 Resources £’000 Information Technology £’000 Governance £’000 Total 2019 £’000 Support Costs 2019 Membership Services Learning & Development Awareness 581 238 106 136 55 24 19 8 3 50 21 9 24 10 4 810 332 146
Total support costs 925 215 30 80 38 1,288

6. Governance costs

6. Governance costs
2020 £’000 Meetings and travel expenses Audit fees Legal & professional 5 23 5	2019 £’000
	7 23 8
Total 33	38

----- Start of picture text -----
2020 2019
£’000 £’000
Depreciation 40 140
Amortisation 149 66
Operating lease rentals for land and buildings 381 354
Auditor’s remuneration – External audit (excludes VAT) 23 23
Overseas taxation 5 -
----- End of picture text -----

----- Start of picture text -----
2020 2019
£’000 £’000
Wages and salaries 2,103 2,101
Social security costs 202 206
Pension costs 128 119
Termination payments 4 -
Other staff costs 67 170
Total 2,504 2,596
Other staff costs includes staff training, welfare and
recruitment and fees for agency staff
£78,841 of staff costs have been capitalised during 2020 (2019: £nil),
for staff time spent exclusively on the Finance System Upgrade and
Learning & Development E-Assessment Projects.
The average monthly number of employees
2020 2019
during the year was as follows:
Number of employees involved in charitable activities:
Membership 21 22
Learning & Development 8 9
Awareness 5 4
Number of employees involved in non-charitable activities:
Support 15 15
Total 49 50
----- End of picture text -----

| 60 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

7. Net expenditure for the year

The net outgoing resources for the year are stated after charging:

2020 £’000 Depreciation Amortisation Operating lease rentals for land and buildings Auditor’s remuneration – External audit (excludes VAT) Overseas taxation 40 149 381 23 5	2019 £’000
	140 66 354 23 -

8. Staff costs

----- Start of picture text -----
2019
£’000
7
23
8
38
----- End of picture text -----

8. Staff costs
2020 £’000 Wages and salaries Social security costs Pension costs Termination payments Other staff costs 2,103 202 128 4 67	2019 £’000
	2,101 206 119 - 170
Total 2,504	2,596
Other staff costs includes staff training, welfare and recruitment and fees for agency staff £78,841 of staff costs have been capitalised during 2020 (2019: £nil), for staff time spent exclusively on the Finance System Upgrade and Learning & Development E-Assessment Projects. The average monthly number of employees during the year was as follows: 2020 Number of employees involved in charitable activities: Membership Learning & Development Awareness 21 8 5 Number of employees involved in non-charitable activities: Support 15
	2019
	22 9 4
	15
Total 49	50

Notes to the financial statements[|] Annual Report 2020[|] 61[|]

Notes to the financial statements

The number of employees whose remuneration (excluding redundancy) fell into the following bands were: 2020 £60,001 – £70,000 £70,001 – £80,000 £80,001 – £90,000 £90,001 – £100,000 £100,001 - £110,000 £110,001 – £120,000 3 2 - 2 - 2
	2019
	2 1 2 - 1 2

The Institute made contributions of £47,824 (2019: £39,506) to the money purchase personal pension schemes of eight (2019: eight) employees whose emoluments exceeded £60,000.

The Institute considers its key management personnel comprises the Trustees and the Senior Management Team (SMT). The Trustees provide their time free of charge. The total remuneration, employer’s national insurance contributions, benefits and pensions paid to or on behalf of the SMT in the year was £458,669 (2019: £484,773).

----- Start of picture text -----
2020 2019
£’000 £’000
5 -
Overseas Taxation
----- End of picture text -----

| 62 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

----- Start of picture text -----
2019
2
1
2
-
1
2
----- End of picture text -----

9. Related party transactions

No member of the Board received any remuneration in 2020 (2019: £nil) for their roles as Trustees. A total of £775 (2019: £4,806) was paid to, or to third parties on behalf of, 11 (2019: 11) members of the Board in reimbursement of expenses incurred on Institute business during the year. In addition to this, the Institute paid £2,355 for Trustee indemnity insurance (2019: £2,352).

One of the Institute’s Trustees is the Director of Quality at Balfour Beatty. As a Corporate Partner of the Institute, Balfour Beatty were invoiced and paid a membership fee of £4,950 in 2020 (2019: £5,500). This transaction was in line with the Institute’s normal course of business and its standard terms and conditions, there was no outstanding balance at 31 December 2020 (2019: £nil), and no amounts were written off during the year (2019: £nil).

An individual who up until December 2019 served as a Trustee commenced employment with the Institute as Executive Director of Policy in 2020.

The following members of the Institute’s senior management team are also members of the Board of Directors of the Institute’s subsidiary, IRCA Japan KK: Vincent Desmond and Tally Singer. In 2020, an annual royalty of £185,832 (2019: £221,720) was charged by the Institute to IRCA Japan KK, with the full balance being outstanding at 31 December 2020 and expected to be paid in 2021 (2019: £221,720 was outstanding at 31 December 2019 and was paid in full in 2020).

10. Taxation

The Institute is a registered charity and is, therefore, not subject to corporation tax on its charitable activities. No provision has been made for corporation tax for CQI Services Ltd as the company has no taxable profits in 2020. Overseas taxation relates to income tax suffered by IRCA Japan KK on its profits for the year.

2020 £’000 Overseas Taxation 5
	2019 £’000
	-

Notes to the financial statements[|] Annual Report 2020[|] 63[|]

Notes to the financial statements

11. Intangible fixed assets of the Group and Institute

11. Intangible fxed assets of the Group and Institute
Group Website Development £’000 Intellectual Property £’000 Software & Systems £’000 Cost As at 1 January 2020 Additions – internally generated Written off in the year 542 - - 291 9 - 145 243 -	Total £’000
	978 252 -
As at 31 December 2020 542 300 388	1,230
Amortisation As at 1 January 2020 Charge for the year Written off in the year 516 16 - 175 59 - 2 74 -
	693 149 -
As at 31 December 2020 532 234 76	842
Net book value As at 31 December 2020 10 66 312
	388
As at 31 December 2019 26 116 143	285

----- Start of picture text -----
Website Intellectual Software & Total
The Institute Development Property Systems
£’000 £’000 £’000 £’000
Cost
As at 1 January 2020 503 291 145 939
Additions – internally generated - 9 243 252
Written off in the year - - - -
As at 31 December 2020 503 300 388 1,191
Amortisation
As at 1 January 2020 503 175 2 680
Charge for the year - 59 74 133
Written off in the year - - - -
As at 31 December 2020 503 234 76 813
Net book value
As at 31 December 2020 - 66 312 378
As at 31 December 2019 - 116 143 259
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| 64 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

The Institute Website Development £’000 Intellectual Property £’000 Software & Systems £’000 Cost As at 1 January 2020 Additions – internally generated Written off in the year 503 - - 291 9 - 145 243 -	Total £’000
	939 252 -
As at 31 December 2020 503 300 388	1,191
Amortisation As at 1 January 2020 Charge for the year Written off in the year 503 - - 175 59 - 2 74 -
	680 133 -
As at 31 December 2020 503 234 76	813
Net book value As at 31 December 2020 - 66 312
	378
As at 31 December 2019 - 116 143	259

Included in intangible fixed assets: website development costs of £38,761 (2019: £38,761), accummulated depreciation of £28,249 (2019: £12,696) and net book value of £10,513 (2019: £26,065) relating to assets developed by IRCA Japan KK.

Notes to the financial statements[|] Annual Report 2020[|] 65[|]

Notes to the financial statements

12. Tangible fixed assets

12. Tangible fxed assets
Group Improvements to premises £’000 Offce equipment and furniture £’000 Computer hardware £’000 Cost As at 1 January 2020 Additions in year Disposals 192 12 - 46 11 - 25 24 -	Total £’000
	263 47 -
As at 31 December 2020 204 57 49	310
Depreciation As at 1 January 2020 Charge for the year Eliminated on disposal 165 20 - 34 12 - 23 8 -
	222 40 -
As at 31 December 2020 185 46 31	262
Net book value As at 31 December 2020 19 11 18
	48
As at 31 December 2019 27 12 2	41

----- Start of picture text -----
Improvements Office Computer Total
to premises equipment hardware
The Institute
and furniture
£’000 £’000 £’000 £’000
Cost
As at 1 January 2020 192 25 25 242
Additions in year 12 - 24 36
Disposals - - - -
As at 31 December 2020 204 25 49 278
Depreciation
As at 1 January 2020 165 20 23 208
Charge for the year 20 5 8 33
Eliminated on disposal - - - -
As at 31 December 2020 185 25 31 241
Net book value
As at 31 December 2020 19 - 18 37
As at 31 December 2019 27 5 2 34
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| 66 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

12. Tangible fixed assets (continued)

12. Tangible fxed assets (continued)
The Institute Improvements to premises £’000 Offce equipment and furniture £’000 Computer hardware £’000 Cost As at 1 January 2020 Additions in year Disposals 192 12 - 25 - - 25 24 -	Total £’000
	242 36 -
As at 31 December 2020 204 25 49	278
Depreciation As at 1 January 2020 Charge for the year Eliminated on disposal 165 20 - 20 5 - 23 8 -
	208 33 -
As at 31 December 2020 185 25 31	241
Net book value As at 31 December 2020 19 - 18
	37
As at 31 December 2019 27 5 2	34

Included in tangible fixed assets: office equipment and furniture are costs of £32,768 (2019: £21,373), depreciation of £21,489 (2019: £14,492) and net book value of £11,280 (2019: £6,881) relating to assets purchased by IRCA Japan KK.

Notes to the financial statements[|] Annual Report 2020[|] 67[|]

Notes to the financial statements

13. Fixed asset investments

13. Fixed asset investments
Group 2020 £’000 2019 £’000 Listed investments Unlisted investments 1,610 - 1,621 -	Institute
	2020 £’000 2019 £’000
	1,610 81 1,619 80
Market value as at 31 December 1,610 1,621	1,691 1,699
Historic cost of investments 950 950	1,031 1,031
Analysis of movement: As at 1 January Additions Net gains/(losses) 1,621 - (11) 1,403 - 218
	1,699 - (8) 1,481 - 218
As at 31 December 1,610 1,621	1,691 1,699

Listed investments

In January 2011, an investment was made in a Common Investment Fund. As at 31 December 2020, the fund comprised 38% UK equities, 45% overseas equities, 13% bonds and 4% cash. Their fair value as at 31 December 2020 and 2019 is shown above.

Unlisted investments in subsidiary undertakings

The Institute holds 100% of the voting capital of CQI Services Ltd, a company registered in England. The share capital of the company comprises 10,000 shares of £1 each. The company’s principle activities are the provision of advertising revenue in the Quality World magazine and the CQI websites, management consultancy referrals, catering and hire of facilities. The company also manages the International Quality Awards.

----- Start of picture text -----
Group Institute
2020 2019 2020 2019
£’000 £’000 £’000 £’000
Trade debtors 98 146 52 110
Amounts owed by Group undertakings - - 222 307
Other debtors 157 184 92 101
Prepayments and accrued income 504 617 504 571
Total 759 947 870 1,089
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----- Start of picture text -----
Group Institute
2020 2019 2020 2019
£’000 £’000 £’000 £’000
Trade creditors 69 126 36 103
Other taxes and social security 80 81 54 59
Other creditors 70 45 69 45
Accruals and deferred income 1,869 1,570 1,467 1,171
Total 2,088 1,822 1,626 1,378
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The Institute holds 100% of the 10 million Japanese Yen voting share capital of the International Register of Certified Auditors Japan KK, a company registered in Japan. The company’s principal activity is to provide local marketing, administration and certification services to Japanese auditors.

| 68 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

14. Debtors

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Institute
2019 2020 2019
£’000 £’000 £’000
1,621 1,610 1,619
- 81 80
1,621 1,691 1,699
950 1,031 1,031
1,403 1,699 1,481
- - -
218 (8) 218
1,621 1,691 1,699
----- End of picture text -----

14. Debtors
Group 2020 £’000 2019 £’000 Trade debtors Amounts owed by Group undertakings Other debtors Prepayments and accrued income 98 - 157 504 146 - 184 617	Institute
	2020 £’000 2019 £’000
	52 222 92 504 110 307 101 571
Total 759 947	870 1,089

15. Creditors

15. Creditors
Group 2020 £’000 2019 £’000 Trade creditors Other taxes and social security Other creditors Accruals and deferred income 69 80 70 1,869 126 81 45 1,570	Institute
	2020 £’000 2019 £’000
	36 54 69 1,467 103 59 45 1,171
Total 2,088 1,822	1,626 1,378

Notes to the financial statements[|] Annual Report 2020[|] 69[|]

Notes to the financial statements

16. Deferred income

Group 2020 £’000 2019 £’000 At 1 January Amount released to incoming resources Amount deferred in the year 1,375 (1,375) 1,645 1,447 (1,447) 1,375	Institute
	2020 £’000 2019 £’000
	995 (995) 1,254 1,081 (1,081) 995
At 31 December 1,645 1,375	1,254 995

Included in creditors is a total of £1,645,252 (2019: £1,374,978) that relates to deferred income. £792,938 relates to IRCA membership renewal fees received in the year but not yet earned (2019: £711,508). The remainder is income for 2021 fees raised in October, November and December 2020. This figure consists of £516,545 (2019: £443,705) for CQI Membership, £208,928 (2019: £176,490) for IRCA Membership, £83,571 for fees from Corporate Partners (2019: £7,200) and £38,271 from IRCA OEA fees (2019: £25,895).

17. Provisions for other liabilities

17. Provisions for other liabilities
Dilapidations Provision £’000 The Group and Institute had the following provisions during the year: At 1 January 2020 Additions dealt with in the Statement of Financial Activity Reclassifed as current liability during the year 79 - (79)	Total £’000
	79 - (79)
As at 31 December 2020 -	-

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Group Institute
2020 2019 2020 2019
£’000 £’000 £’000 £’000
Financial assets that are debt instruments
measured at amortised cost:
Trade receivables 98 146 52 110
Other receivables 157 184 92 101
Amounts owed by group - - 222 307
255 330 366 518
Financial assets that are debt instruments
measured at fair value:
Investments 1,610 1,619 1,610 1,619
Investment in short-term deposits 2,594 2,273 2,209 1,882
4,204 3,892 3,819 3,501
Financial liabilities measured at amortised cost:
Trade creditors 69 126 36 103
Other creditors 150 126 124 104
219 252 160 207
Net financial assets measured at amortised cost 4,240 3,970 4,025 3,812
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As part of the Group’s property leasing arrangements, there is an obligation to repair damages that are incurred during the life of the lease, such as wear and tear. The estimated full cost of the obligation was charged to the statement of financial activity in 2017 and no change to the provision has been deemed necessary in 2020. The provision was utilised in March 2021 when the lease terminated.

| 70 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

18. Financial instruments

----- Start of picture text -----
Institute
2019 2020 2019
£’000 £’000 £’000
1,447 995 1,081
(1,447) (995) (1,081)
1,375 1,254 995
1,375 1,254 995
----- End of picture text -----

The Group has the following financial instruments:

Group 2020 £’000 2019 £’000 Financial assets that are debt instruments measured at amortised cost: Trade receivables Other receivables Amounts owed by group 98 157 - 146 184 -	Institute
	2020 £’000 2019 £’000
	52 92 222 110 101 307
255 330	366 518
Financial assets that are debt instruments measured at fair value: Investments Investment in short-term deposits 1,610 2,594 1,619 2,273
	1,610 2,209 1,619 1,882
4,204 3,892	3,819 3,501
Financial liabilities measured at amortised cost: Trade creditors Other creditors 69 150 126 126
	36 124 103 104
219 252	160 207
Net fnancial assets measured at amortised cost 4,240 3,970	4,025 3,812

Notes to the financial statements[|] Annual Report 2020[|] 71[|]

Notes to the financial statements

19. Other financial commitments

At 31 December 2020, the Group and Institute had the following future lease payments under non-cancellable operating leases:

At 31 December 2020, the Group and Institute had the following future lease payments operating leases:	under non-cancellable
Land and buildings Group 2020 £’000 2019 £’000 Not later than one year Later than one year and not later than fve years; and Later than fve years 162 16 - 405 98 - Lease payments recognised as an expense through the statement of fnancial activity 381 354	Institute
	2020 £’000 2019 £’000
	98 - - 391 98 -
	326 326

The Institute entered into a new 10 year lease in February 2021.

----- Start of picture text -----
Fund balances Income Expenditure Transfers Gains
brought and
forward losses
Group 2020 £’000 £’000 £’000 £’000 £’000
General Funds 2,007 4,511 (4,252) (327) (20)
Fixed Asset Reserve 326 - (189) 299 -
PQG Reserve 134 26 (32) - -
IT Project Reserve 400 - - (190) -
Product Development Reserve 100 - - 230 -
Premises Reserve 300 - - (12) -
Total Funds 3,267 4,537 (4,473) - (20)
The Institute 2020
General Funds 2,280 4,013 (3,783) (318) (5)
Fixed Asset Reserve 293 - (166) 288 -
PQG Reserve 133 26 (32) - -
IT Project Reserve 400 - - (188) -
Product Development Reserve 100 - - 230 -
Premises Reserve 300 - - (12) -
Total Funds 3,506 4,039 (3,981) - (5)
----- End of picture text -----

| 72 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

20. Funds

All assets and liabilities are held within unrestricted funds.

----- Start of picture text -----
Institute
2019 2020 2019
£’000 £’000 £’000
405 98 391
98 - 98
- - -
354 326 326
----- End of picture text -----

	Fund balances	Income	Expenditure	Transfers	Gains	Fund balances
	brought				and	carried
	forward				losses	forward
Group 2020	£’000	£’000	£’000	£’000	£’000	£’000
General Funds	2,007	4,511	(4,252)	(327)	(20)	1,919
Fixed Asset Reserve	326	-	(189)	299	-	436
PQG Reserve	134	26	(32)	-	-	128
IT Project Reserve	400	-	-	(190)	-	210
Product Development Reserve	100	-	-	230	-	330
Premises Reserve	300	-	-	(12)	-	288
Total Funds	3,267	4,537	(4,473)	-	(20)	3,311
The Institute 2020
General Funds	2,280	4,013	(3,783)	(318)	(5)	2,187
Fixed Asset Reserve	293	-	(166)	288	-	415
PQG Reserve	133	26	(32)	-	-	127
IT Project Reserve	400	-	-	(188)	-	212
Product Development Reserve	100	-	-	230	-	330
Premises Reserve	300	-	-	(12)	-	288
Total Funds	3,506	4,039	(3,981)	-	(5)	3,559

Notes to the financial statements[|] Annual Report 2020[|] 73[|]

Notes to the financial statements

20. Funds (continued)

20. Funds (continued)
	Fund balances	Income	Expenditure	Transfers	Gains	Fund balances
	brought				and	carried
	forward				losses	forward
Group 2019	£’000	£’000	£’000	£’000	£’000	£’000
General Funds	967	5,148	(4,638)	329	201	2,007
Fixed Asset Reserve	384	-	(210)	152	-	326
PQG Reserve	122	40	(37)	-	9	134
IT Project Reserve	966	-	-	(566)	-	400
Product Development Reserve	15	-	-	85	-	100
Premises Reserve	300	-	-	-	-	300
Total Funds	2,754	5,188	(4,885)	-	210	3,267
The Institute 2019
General Funds	1,231	4,687	(4,177)	343	196	2,280
Fixed Asset Reserve	350	-	(195)	138	-	293
PQG Reserve	122	39	(37)	-	9	133
IT Project Reserve	966	-	-	(566)	-	400
Product Development Reserve	15	-	-	85	-	100
Premises Reserve	300	-	-	-	-	300
Total Funds	2,984	4,726	(4,409)	-	205	3,506

----- Start of picture text -----
General PQG IT Project Fixed Asset Product Premises
Funds Reserve Reserve Reserve Development Reserve
Reserve
Group 2020 £’000 £’000 £’000 £’000 £’000 £’000
- - - 388 - -
Intangible fixed assets
- - - 48 - -
Tangible fixed assets
Investments 1,542 68 - - - -
Current assets 2,465 60 210 - 330 288
Current liabilities (2,088) - - - - -
Non-current liabilities - - - - - -
1,919 128 210 436 330 288
The Institute 2020
- - - 378 - -
Intangible fixed assets
- - - 37 - -
Tangible fixed assets
Investments 1,623 68 - - - -
Current assets 2,189 60 212 - 330 288
Current liabilities (1,626) - - - - -
Non-current liabilities - - - - - -
2,186 128 212 415 330 288
----- End of picture text -----

The Fixed Asset reserve represents the approximate value of tangible and intangible assets as these funds are not available for day-to-day operations of the Institute.

The PQG reserve is equal to the bank balances and share of investments held by the Pharmaceutical Quality Group. This special interest group meets the needs of quality professionals within the pharmaceutical industry through regular meetings on quality assurance, good manufacturing practice and ‘hot-topics’ and developing guidance on a range of regulatory requirements.

The IT project reserve represents money set aside for the planned redevelopment of the Institute’s digital infrastructure.

The Product Development reserve represents money set aside for the continuation of Learning and Development projects.

The Premises reserve represents money set aside for relocation when the Institute’s lease of its Furnival Street offices expires in 2021.

| 74 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

21. Analysis of net assets between funds

	General	PQG	IT Project	Fixed Asset	Product	Premises	2020
	Funds	Reserve	Reserve	Reserve	Development	Reserve	Total
					Reserve		Funds
Group 2020	£’000	£’000	£’000	£’000	£’000	£’000	£’000
Intangible fxed assets	-	-	-	388	-	-	388
Tangible fxed assets	-	-	-	48	-	-	48
Investments	1,542	68	-	-	-	-	1,610
Current assets	2,465	60	210	-	330	288	3,353
Current liabilities	(2,088)	-	-	-	-	-	(2,088)
Non-current liabilities	-	-	-	-	-	-	-
	1,919	128	210	436	330	288	3,311
The Institute 2020
Intangible fxed assets	-	-	-	378	-	-	378
Tangible fxed assets	-	-	-	37	-	-	37
Investments	1,623	68	-	-	-	-	1,691
Current assets	2,189	60	212	-	330	288	3,079
Current liabilities	(1,626)	-	-	-	-	-	(1,626)
Non-current liabilities	-	-	-	-	-	-	-
	2,186	128	212	415	330	288	3,559

Notes to the financial statements[|] Annual Report 2020[|] 75[|]

Notes to the financial statements

21. Analysis of net assets between funds (continued)

	General	PQG	IT Project	Fixed Asset	Product	Premises 2019
	Funds	Reserve	Reserve	Reserve	Development	Reserve Total
					Reserve	Funds
Group 2019	£’000	£’000	£’000	£’000	£’000	£’000 £’000
Intangible fxed assets	-	-	-	254	-	- 254
Tangible fxed assets	-	-	-	72	-	- 72
Investments	1,553	68	-	-	-	- 1,621
Current assets	2,355	66	400	-	100	300 3,221
Current liabilities	(1,822)	-	-	-	-	- (1,822)
Non-current liabilities	(79)	-	-	-	-	- (79)
	2,007	134	400	326	100	300 3,267
The Institute 2019
Intangible fxed assets	-	-	-	254	-	- 254
Tangible fxed assets	-	-	-	39	-	- 39
Investments	1,631	68	-	-	-	- 1,699
Current assets	2,106	65	400	-	100	300 2,971
Current liabilities	(1,378)	-	-	-	-	- (1,378)
Non-current liabilities	(79)	-	-	-	-	- (79)
	2,280	133	400	293	100	300 3,506

----- Start of picture text -----
At 1 January Cash flows Aquired Foreign
2020 exchange
movements
Group 2020 £’000 £’000 £’000 £’000
Cash at bank and in hand 897 473 - (9)
Short-term deposits 1,377 (144) - -
2,274 329 - (9)
At 1 January Cash flows Aquired Foreign
2019 exchange
movements
Group 2019 £’000 £’000 £’000 £’000
Cash at bank and in hand 630 275 - (8)
- -
Short-term deposits 1,432 (55)
2,062 220 - (8)
----- End of picture text -----

| 76 | Annual Report 2020 | Notes to the financial statements

Notes to the financial statements

22. Analysis of changes in net debt

	At 1 January	Cash fows	Aquired	Foreign	At 31
	2020			exchange	December
				movements	2020
Group 2020	£’000	£’000	£’000	£’000	£’000
Cash at bank and in hand	897	473	-	(9)	1,361
Short-term deposits	1,377	(144)	-	-	1,233
	2,274	329	-	(9)	2,594
	At 1 January	Cash fows	Aquired	Foreign	At 31
	2019			exchange	December
				movements	2019
Group 2019	£’000	£’000	£’000	£’000	£’000
Cash at bank and in hand	630	275	-	(8)	897
Short-term deposits	1,432	(55)	-	-	1,377
	2,062	220	-	(8)	2,274

Notes to the financial statements[|] Annual Report 2020[|] 77[|]

Board of Trustees

Ian Mitchell, CQP FCQI works for Network Rail as Quality & Business Improvement Director. Before taking up the role as chair of the Board of Trustees in December 2015, Ian served the CQI as a Trustee and as a member of the Advisory Council, Governance Committee and the Professional Policy Panel. He brings to the CQI over 40 years of experience within the aerospace, defence, nuclear and rail sectors globally. During this time, he has led numerous quality teams but also held positions in manufacturing, project management, procurement, finance and engineering. This allows him to see quality from many perspectives.

Hannah Kingsley, BVSc FCA works for Network Rail as the Finance Director for Anglia Route, leading the finance, change and liabilities teams as part of the new devolved business structure. Prior to this, Hannah worked for Rail Delivery Group as Director Commercial Service and Assurance. She led the governance, internal audit & risk, business change and commercial & procurement functions, as well as in previous senior finance roles at Network Rail and Deloitte LLP. In her role as Honorary Treasurer, Hannah brings to the CQI extensive experience working across financial control, financial planning & analysis and commercial finance.

Amanda McKay, CQP FCQI is Quality & Assurance Director for Balfour Beatty Vinci. She has 27 years’ experience in the construction, nuclear and power generation sectors and in charity operation, people management and diversity in her role as a Trustee with other charities. A founding member and Chair of the CQI Nuclear Special Interest Group, Amanda has worked to develop additional competency requirements for quality professionals and to help establish the first Quality Apprentice Scheme for the Nuclear sector.

David Anderson, CQP, FQCI is Head of Business Process and Quality for BAM Nuttall Ltd. He brings 30 years’ experience within the construction industry. David is passionate about the role quality plays within business and operational excellence and is an advocate in utilising technology as an enabler for the future of quality. He is actively engaged with the CQI Construction Special Interest Group and a variety of other groups and organisations within the UK and Europe. He is a Director and Trustee of the Lean Construction Institute, an educational charity. He was also winner of the Quality Professional of the Year award at the 2020 International Quality Awards.

David Straker, CQP FCQI is now retired. He brings to the CQI experience from an extensive career in a variety of roles, in both public and private organisations. These included a leading role in the award-winning Hewlett Packard UK quality department and as Quality Manager for the national school Statutory Assessment Tests (SATs). He also brings an understanding of psychology within the profession and still writes about ‘changing minds’ for a major knowledge website on this topic.

Rashad Issa, CQP, FCQI works for the Baltic Exchange as the Quality and Business Improvement Lead and sits on the Board of the Project Management Institute UK. Before becoming a Trustee, he volunteered for the CQI London Committee for over three years and was part of the pilot groups of various CQI initiatives, such as the mentoring programme and the Quality Connect platform. His experience ranges from the financial services and retail to the health sector. Rashad has extensive experience in guiding the development and delivery of robust operational strategies, streamlining complex policies and procedures on a global scale, establishing project management offices from the ground up, and bringing quality management frameworks to stakeholders at different levels in order to achieve strategic initiatives.

| 78 | Annual Report 2020 | Board of Trustees

Roxann Dawson, CQP FCQI works for Network Rail as Head of Quality. Before becoming a Trustee in September 2017, Roxann served as a member of the Advisory Council and in 2020 accepted the appointment to chair the Governance Risk Committee. She brings a wealth of experience across construction including civil experience, project management and transportation (London Underground & Rail). Roxann is known for her passion and energy for the sustainability of the quality profession. She is an advocate not only for the CQI, but also for the profession at large.

Richard Allan, CQP FCQI retired from the KimberlyClark Corporation in 2020 as Director, Global Quality Assurance. Before becoming a Trustee in September 2017, Richard served as a member of the Advisory Council, Nominating Committee and Standards Development Group. Richard has more than 35 years of industrial experience predominantly in quality management. He has extensive experience setting and deploying quality strategy, initiatives and metrics across a large and diverse multinational corporation well known for its leading brands of everyday products.

Natalie Shoemark-Dyer, CQP FCQI is Head of Quality at Aspire Defence Services Limited. She brings a decade of experience in fields from facilities management to telecoms, implementing management systems and embedding quality culture. Natalie was Chair of the CQI’s Next Generation Network in October 2014, and October 2018 and worked with her team in supporting the mission of the CQI to redefine the profession and attract the next generation of quality professionals. She is also Chair of the CQI’s Thames Valley branch. Natalie remains an advocate for the future of the profession in her role as a Board Trustee.

Rachelle Beasley, CQP MCQI works as Transformation Lead for Hafod, a not-for-profit housing, health and social provider. She brings a decade of experience in quality and auditing across various industries and gained a MSc in Quality Management in 2017. Rachelle was part of the Next Generation Network Committee from 2015 to 2019, working to make quality a career choice for young people. She brings experience within the voluntary sector and as a Board member, sitting on two Boards for charitable organisations that work to make lives better within communities. Rachelle is also an advocate for young quality professionals, diversity and the future of quality.

Ian McCabe, CQP FCQI is a Director at NXTGen Quality Limited. He has over 20 years’ experience as a senior leader helping organisations in both the public and private sectors across a number of industries. These include: engineering, manufacturing, management consultancy, utilities and postal services to manage change, avoid excessive costs, protect reputation, reduce risks and maximise opportunities. As a member of the CQI’s Corporate Partner Directors Round Table, Ian helped to shape the CQI’s strategic objectives. He has also been involved in the design, development and improvement of both the CQI’s Competence and Learning and Development Frameworks. In 2015, Ian was recognised by Quality World magazine as one of the top 10 people who helped shape its thinking of best practice in quality.

Board of Trustees[|] Annual Report 2020[|] 79[|]

Board of Trustees

----- Start of picture text -----
Attendance
Date of
Current office at Board
Position appointment/ Committee member
holder meetings in
resignation
2020
----- End of picture text -----

----- Start of picture text -----
Attendance
Date of
Current office at Board
Position appointment/
holder meetings in
resignation
2020
----- End of picture text -----

Position	Current offce holder	Date of appointment/ resignation	Attendance at Board meetings in 2020	Committee member
Chair	Ian Mitchell	Appointed September 2012	4/4	Finance and Remuneration Committee
Honorary Treasurer	Hannah Kingsley	Appointed March 2019	4/4	Finance and Remuneration Committee
Board Member	Amanda McKay	Appointed September 2014	3/4	Governance and Risk Committee Nominating Committee Membership Council Liaison
Board Member	Andy Pitt	Appointed September 2014 Resigned September 2020	3/3	Governance and Risk Committee
Board Member	David Straker	Appointed September 2014	4/4	Governance and Risk Committee
Board Member	Roxann Dawson	Appointed September 2017	3/4	Governance and Risk Committee Chair
Board Member	Richard Allan	Appointed September 2017	4/4	Finance and Remuneration Committee Nominating Committee
Board Member	Natalie Shoemark-Dyer	Appointed September 2018	4/4	Finance and Remuneration Committee
Board Member	Rachelle Beasley	Appointed March 2020	4/4	Membership Council Liaison

| 80 | Annual Report 2020 | Board of Trustees

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Attendance
Date of
at Board
appointment/ Committee member
meetings in
resignation
2020
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Position	Current offce holder	Date of appointment/ resignation	Attendance at Board meetings in 2020	Committee member
Board Member	Ian McCabe	Appointed March 2020	4/4	Governance and Risk Committee
Board Member	David Anderson	Appointed March 2021	N/A	Nominating Committee
Board Member	Rashad Issa	Appointed March 2021	N/A

Membership Council

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Name Position
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Name	Position
Dave Smith	Chair
Suzanne Hill	Vice Chair
Angela Fumpson	Member
Don O'Connell	Member
Cathryn Valentyn	Member
Maurice Trevor Walton	Member
Victor Williams	Member
Neil Stanbury	Member
Marc Elmes	Member
Mark Eydman	Member
Kristian Hill	Member
Jon Adshead	Member

Membership Council[|] Annual Report 2020[|] 81[|]

Key management personnel

Director General and Chief Executive Executive Director of Corporate Services Vince Desmond Andrew Lannin Executive Director of Membership and Executive Director Marketing and Commercial Services Communications Tally Singer Heather Chappell

Principal professional advisers

Bankers

Lloyds Bank Plc 98 Victoria Street London SW1E 5JL

External auditors

Haysmacintyre LLP Chartered Accountants 10 Queen Street Place, London EC4R 1AG

Investment managers

Newton Investment Management Ltd BNY Mellon Centre 160 Queen Victoria Street London ECV4 4LA

| 82 | Annual Report 2020 | Key Management Personnel

Special Interest Groups

Special Interest Groups

Construction SIG	Chair	Jon Adshead
	Vice Chair	David Anderson
	Secretary	Neil Mellor
Defence SIG	Chair	Neil Stanbury
	Secretary	John Entwistle
	Chair (April 2020)	Rick Ellis
	Vice Chair (April 2020)	Richard Smith
	Secretary (April 2020)	Steven Blaker
Deming SIG	Chair	Alan Hodges
	Vice Chair	Kevan Leach
	Secretary	Malcolm Gall
Integrated Management SIG	Chair	Ian Dalling
	Secretary	Robert Blackwell
Nuclear SIG	Chair	Amanda McKay
	Vice Chair	Richard Hibbert
	Secretary	James Brown
Pharmaceutical SIG	Chair	Jane Smith
	Vice Chair	Neil Wayman
Rail SIG	Chair	Jon Briggs
	Vice Chair	Daniel Quant

Special Interest Groups[|] Annual Report 2020[|] 83[|]

Professional Network Officers

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EASTERN REGION Regional Chair Don O'Connell
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EASTERN REGION	Regional Chair	Don O'Connell
Milton Keynes branch	Chair	Paul Simpson
Peterborough and Cambridge branch	Chair	Kevin Newey
	Secretary	AnthonyHayward
South Anglia branch	Chair	BarryAvis
	Secretary	Neil Hilton

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MIDLANDS REGION Regional Chair Mark Eydman
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MIDLANDS REGION	Regional Chair	Mark Eydman
	Vice Chair	TonyBrachmanski
	Secretary	Jaz Tanwar
Birmingham branch	Chair	Bob Hughes
	Secretary	Jaz Tanwar
Derby and Nottingham branch	Chair	Simon Dewsbury
	Vice Chair	Adrian Petch
	Secretary	Suzanne Hill
	Chair(April 2020)	Suzanne Hill
	Secretary (April 2020)	SamanthaJackson
Leicester and Coventry branch	Chair	Mark Eydman
	Vice Chair	Sarah Maddox
	Secretary	Adrian Stokes
Wolverhampton branch	Chair	TonyBrachmanski
	Vice Chair	CraigCartwright
	Secretary	Keith Vaughan

NORTH EAST REGION	Regional Chair	Trevor Walton
Teesside branch	Chair	Trevor Walton
	Vice Chair	Mike Amour
	Secretary	Austin McGlynn
Tyne and Wear branch	Chair	Leigh Henderson
	Vice Chair	Colin Humble
	Secretary	John Mills

| 84 | Annual Report 2020 | Professional Network Officers

Professional Network Officers

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NORTHERN REGION Acting Regional Chair Victor Williams
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NORTHERN REGION	Acting Regional Chair	Victor Williams
Cumbria branch	Chair	Kevin Taylor
	Vice Chair	Ryan Mower
	Secretary	Geoff Edmondson
Greater Manchester branch	ActingChair	Victor Williams
	Secretary	Louise Buss
Yorkshire branch	Chair	Hugh Everson
	Vice Chair	Alexander Diamantis
	Secretary	Bob Marshall

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NORTHERN IRELAND Regional Chair Kristian Hill
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NORTHERN IRELAND	Regional Chair	Kristian Hill
Northern Ireland branch	Chair	Kristian Hill
	Vice Chair	Michael McCusker
	Secretary	Gerard Heatley

SCOTLAND	Regional Chair	Colin Campbell
	Secretary	Jeff Marven
North of Scotland branch	Vice Chair	Colin Campbell
	Secretary	Denise Morrison
	Secretary	Abigail Hastie
West of Scotland branch	Chair	Ron Rivans
	Vice Chair	Jim Burns
	Secretary	Jeff Marven
East of Scotland branch	Chair	Gemma Parnell
	Secretary	William Shanks

Professional Network Officers[|] Annual Report 2020[|] 85[|]

Professional Network Officers

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SOUTH EAST REGION Regional Chair Cathryn Valentyne
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SOUTH EAST REGION	Regional Chair	Cathryn Valentyne
London branch	Chair	Jonathan Bishop
	Secretary	Jennifer De Sousa
Southern branch	Chair	Cathryn Valentyne
Thames Valley branch	Chair	Natalie Shoemark-Dyer
	Vice Chair	William Rankin
	Secretary	Tom Gould
Surrey and Sussex branch	Chair	CourtneyFranklin
	Vice Chair	Nikki Thomas
	Secretary	Heather Kane
	Chair	Mehrdad Kamali

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SOUTH WEST REGION Regional Chair Angela Fumpson
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SOUTH WEST REGION	Regional Chair	Angela Fumpson
Avon branch	Chair	Angela Fumpson
	Vice Chair	Neil Hilton
	Secretary	Denise Ramsay
Gloucester branch	Chair	Paul Snowdon
	Secretary	GaryMartin
Wales branch	Chair	Derek Lewis

OVERSEAS
Hong Kong branch	Chair	M.H. Isa
	Vice Chair	Vincent Chui
	Secretary	Jaco Lee
	Treasurer	Eric Ng
Taiwan branch	Chair	Jeff Monk
	Secretary	Murli Mohan
Ireland branch	Chair	Caroline Geoghegan
	Vice Chair	Shane Blaney
	Secretary	Susanne Carpenter

| 86 | Annual Report 2020 | Professional Network Officers

Third floor, 90 Chancery Lane Holborn, London WC2A 1EU Incorporated by Royal Charter and registered as charity number 259678 www.quality.org | 88 | Annual Report 2020 | Consolidated Statement of Financial Activities