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Home / Business

Fran O'Sullivan: Brain tumour felled Fonterra's last hands on chairman

Fran O'Sullivan
By Fran O'Sullivan
Head of Business·NZ Herald·
29 Jan, 2019 04:00 PM5 mins to read

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Fonterra Chairman John Wilson during the Fonterra Annual Results briefing in 2016.

Fonterra Chairman John Wilson during the Fonterra Annual Results briefing in 2016.

COMMENT:

John Wilson who died on Monday at just 54 years of age was possibly the last Fonterra chairman to take a hands on approach to governing New Zealand's largest company.

It was inevitable that Wilson would play a strong and sometimes quite political role in public life in New Zealand - the upshot of Fonterra's dominance of the dairy industry - at times locked into confrontational situations with equally strong-minded politicians on both sides of the House.

Wilson was passionately devoted to Fonterra; strong-willed, direct, not afraid of anyone – yet also imbued with sufficient charm, persuasiveness and an ability to ride through the hard-knuckled politics of the NZ dairy industry to survive many a battle until his last year as chair.

But he was also a private man. A family man who leaves behind him wife Belinda and four daughters of whom he was inordinately proud and had let both them and his colleagues know it.

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So private in fact, that when Wilson's resignation last year was the subject of a particularly graceless – and spectacularly wrong tweet – the respect for the former Fonterra chairman at a personal level was such that neither the company, nor colleagues among the senior business community, revealed publicly that he had developed an aggressive brain tumour.

They knew that was the way "John wanted it" and they respected that.

As he texted me at that time, "It's not very nice having your private situation play into full public discussion so hopefully it will pass quickly."

His hope of a 100 per cent recovery was not to be. Yet, he faced his situation with equanimity continuing to attend Fonterra board meetings (by phone when he was "having particularly bad days') until he stepped down from the board itself last November.

A Fonterra insider confirmed signs that "John wasn't well" started to appear in May/June last year.

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It was a particularly brutal time in Fonterra's history.

First, Fonterra unveiled its first ever net loss of $160 million including a massive write down on its investment in Chinese dairy firm Beingmate; second, the Fonterra board also brought forward former CEO Theo Spierings' own resignation announcement to coincide with the financial result; then Wilson found himself facing a personal attack from NZ First Cabinet Minister Shane Jones at the annual KPMG breakfast at Fieldays.

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The initial treatment was said to be promising. But it was obvious to both Wilson and the Fonterra board that if he was to come through strongly he would need to take the pressure off and concentrate on his recovery.

Wilson had already eased back and did not attend Fonterra's annual Europe review.

But not widely known outside of Fonterra's senior ranks is the fact that Spierings himself had also had periods of ill-health during his last months as CEO which saw him take time away from the lead role resulting in more pressure all round.

Wilson became Fonterra chair in 2012.

Like Sir Henry van der Heyden who had been his mentor he was a hands-on chairman - the kind which the corporate world would describe as an "executive chair". Van der Heyden worked first with CEO Craig Norgate (since deceased) then CEO Andrew Ferrier. While Van der Heyden blooded Spierings in as CEO, the latter's period as chief executive was mainly under Wilson.

It is fair to say that Wilson had a hefty workload as he fronted at Government level a range of tough biosecurity issues such as the 2013 WPC80 – or false botulinum affair – which exposed weaknesses in Fonterra's management and governance. This cost Fonterra customers, resulted in a mighty court-ordered damages settlement with Danone and the company's pole positioning in the Chinese dairy market,

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There were other issues: DCD contamination in milk, false allegations of 1080 contamination; the impact of a severe drought, a price slump and a buildup of inventory in the key Chinese market.

When times were tough, an empathetic Wilson was to the fore making arrangements for Fonterra to basically be a private bank to its own farmer shareholders extending them preferential loans to get by.

Yet there were also concerns at the overall structure of Fonterra's governance which persist to this day.

After Wilson and Spierings left, the new chairman John Monaghan - who could not have expected to take on the role - opted for a more traditional approach with more clearly delineated lines between the board and management. This included a review of Fonterra's assets and a new strategy to recover its financial position.

Wilson's own role had not been simply confined to Fonterra. He was an advocate for the farming sector - when it came to environmental issues. This saw him offside with Environment Minister David Parker who demanded to attend a board meeting shortly after the Coalition government was formed. Then there were the discussions over the DIRA which are ongoing.

On the international front, Wilson was involved with the TPP negotiations led by former National Trade Minister Tim Groser and was a member of the China Council.

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He was passionate about NZ's success.

Fonterra was yesterday looking to the logistics of holding Wilson's funeral at Mystery Creek - site of the annual Fielddays event outside of Hamilton.

There were no churches or venues large enough in Te Awamutu for the numbers expected.

A fitting and very public funeral for very private man..

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