Fonterra head to quit after 'meeting goals'

By PHILIPPA STEVENSON, agriculture editor

Fonterra chairman John Roadley was critical when fellow director Mike Smith quit his board barely four months after the new company formed.

Seven months to the day since that first shock resignation Roadley is following Smith out the door.

Yesterday - three weeks from Fonterra's first annual meeting and two months before it marks its first birthday on October 16 - Roadley, 57, unexpectedly announced he had achieved his goals and would leave the company at the end of the year.

He will chair the $14 billion Fonterra's annual meeting in Hamilton on September 12 before handing over to chairman-elect Henry van der Heyden.

The elevation of van der Heyden, 44, also came as a surprise yesterday, with the former New Zealand Dairy Group chairman leapfrogging Fonterra deputy chairman and Roadley's heir apparent, former Kiwi Dairies chairman Greg Gent, to land the top job.

Roadley rejected suggestions he was going after a series of embarrassments for the company, the most recent the failure to pick up farmers' milk in the Waikato, and a $34 million financial reporting discrepancy between figures reported in July and in last week's annual report.

His move also comes as the shareholders council is about to release an expected critical review of Fonterra's first-year performance, and a series of around 40 shareholders meetings is being held nationwide next month in the lead-up to the annual meeting.

Industry sources suggested plans were well advanced for the annual meeting and there had been no suggestion it would be Roadley's swansong.

Fonterra Shareholders Council chairman Tony O'Boyle confirmed the resignation was unexpected.

He learned of the departure only when Roadley called him from the board's monthly meeting yesterday.

But O'Boyle said he would reject suggestions that Roadley had been forced out to blunt growing farmer dissatisfaction with the company's performance, which includes a $50 million loss after payments to farmers.

"The surprise resignation of Mike Smith at the beginning of the year was a wee bit of a concern but since then it has gone really, really well from what we've seen.

"All credit to John. He kept it on track."

Last month shareholders voted to reduce farmer directors on the board from 10 to 9 by December, and increase appointed directors from three to four.

Roadley's retirement will provide the necessary cut and avoid another national election campaign for the farmer directors - the second this year for three directors elected in May.

Agriculture Minister Jim Sutton said yesterday that Roadley had worked hard for New Zealand's benefit.

"The formation of Fonterra was an extremely demanding process, on both company representatives and officials," Sutton said.

"Not many people thought we could meet the ambitious timeline set for this.

"That we did owes much to the leadership of John Roadley."

Roadley said he had always seen his chairmanship as "comparatively short-term".

"I set myself three goals - to ensure our shareholders agreed to the merger, to see the co-operative through the risky transitional first year, [and] to achieve consensus among the board and management on Fonterra's future business strategy."

The first two were achieved, he said. And work on the business strategy - Project Galileo - would be completed by the end of the year.