Director hopefuls vow to keep farmers up to date

By PHILIPPA STEVENSON agriculture editor

Fonterra's dubious communication record with shareholders is shaping up as a key issue for candidates in the mega dairy co-op's first director elections.

Nominations for three farmer seats on the board of the six-month-old company closed a week ago, but confirmation of the candidates by the firm's two returning officers is expected only today.

Business Herald inquiries have revealed eight candidates, including the three directors balloted to step down in what will ultimately become an annual rotation of a third of the farmer directors.

The board has 10 farmer directors but this number will dip to nine at the second annual meeting.

It has three positions for non-farmer directors but one seat has been vacant since January when Mike Smith resigned, causing a storm of controversy with comments that Fonterra had governance problems.

Those seeking re-election are deputy chairman Greg Gent, Earl Rattray and Gerard Lynch.

The other known candidates are former New Zealand Dairy Group director Jim van der Poel, Putaruru accountant and farmer David Graham, former Bay Milk director Colin Holmes, and two members of Fonterra's Shareholders Council - former Federated Farmers president and agricultural trade ambassador Malcolm Bailey and Southland farmer Philip van der Bijl.

Gent, 46, the former chairman of Fonterra foundation company Kiwi Dairies, said yesterday that he had led 40 per cent of farmers into Fonterra.

"I want to make sure that it delivers to the level farmers expect and that I know it can," said the Northland farmer.

The company was delivering on its commercial objectives but had fallen down on communicating to farmers, including providing detail of the cost to shareholders of joint ventures with Nestle and other overseas companies, he said.

"We've probably got to get a bit quicker off the mark and sharpen up our communication."

Bailey, 43, was a critic of the mega co-op concept but said he had accepted the majority farmer support for Fonterra and wanted to play a constructive role.

"There is a need for people with some experience in related fields to come on and give it a bit of a fresh look without carrying any baggage from the past," he said.

Bailey is an agricultural economist who has worked for the Reserve Bank.

He said the company's priority should be to prepare a strategic business plan while improving information to farmers.

Holmes, 50, who farms at Galatea, said he was one of a small group who initiated the single-company concept in the mid-90s "and I really want to see it work".

The Fonterra board needed some independent views and fresh perspectives, said Holmes, a director of Bay Milk for nine years until it merged with Dairy Group.

"I think the really big challenge for Fonterra, apart from the normal ones of marketing and running a good ship, will be to hold the shareholders together and communicate well with them."

Rattray, 43, said that commercially Fonterra was "well on the way".

"The initiatives are well on track. We are definitely banking the early, low-hanging fruit of merger benefits, and we are putting a lot of pressure on to get them all, in full and before time."

The company needed to "better articulate its vision, our structure, [and] strategy and clearly demonstrate we've got the resources in place to achieve the objectives of the company," Rattray said.

Van der Bijl, 58, who has farms at Reporoa and Otautau, is a founding director of the Great Milk Company, formed by farmer shareholders of New Zealand Dairy Foods to bid for the half of the local milk market company owned by Fonterra.

He will stand down from the company if elected to Fonterra.

Van der Bijl said yesterday that he had 20 years' industry experience and the knowledge of farming in both islands. He had "fought long and hard" for Fonterra to be formed and because he had not previously serving on any dairy company boards, he had "no baggage to live with".

Van der Poel, an award-winning farmer who has just used a three-month Nuffield Scholarship to study the capital structure of co-operatives in Europe, also said he would bring no "baggage" to the Fonterra board.

The election was the first real opportunity for farmers to have direct input to their representation on the Fonterra board, he said.

Candidates have to cover the country to reach Fonterra's nearly 14,000 shareholders and the company has arranged 11 meetings as well as a video, to be filmed next week, which will be mailed to all electors.

Postal voting will run from April 30 to May 17, with results expected by May 31.

Elections will also be held in 10 wards of the shareholders council, including Otorohanga, where chairman John Wilson has resigned.