John Wilson, who had chaired the co-op since 2012 and has been a director since 2003, has had a major health scare that required surgery and ongoing treatment. While Wilson says he is on the road to recovery, he has made the right call and stepped aside from the chairmanship of Fonterra.
That chairmanship has been an exacting role.
Along the way, Wilson has had to navigate the fallout from major biosecurity issues which required Fonterra to rebuild trust with Beijing, the unfortunate Beingmate investment which was "steered" by the Chinese Government, and a major commodities slump that ripped the guts out of farming profitability.
But he has had heart. During the tough times Fonterra offered its farmers $383 million of interest-free loans to tide them through. Three-quarters of co-operative members took up the offer.
But Wilson leaves on a high note with the forecast farmer payout of $7 per kg of milk solids for the 2018-2019 season one of the best this decade.
Fonterra's rules require the chairmanship to be filled by a farmer shareholder. The four commercial directors on the board cannot step up.
Not only is Fonterra a complex multinational to govern, but as a co-operative it has to be NZ's most political company, with potential farmer directors required to develop tough skins to come through a keenly contested election process with their egos intact.
Monaghan is not short in that space.
And on paper he is undoubtedly the most-qualified of the existing Fonterra farmer shareholder directors. He was blooded as chair of the Fonterra Shareholders Council before joining the board and was not afraid to "bare his teeth" when concerned at the company's direction.
But stepping from being the chief watchdog to a role where as a director he — along with the rest of the board — is jointly responsible for strategy was a different step. Prior to being elected to the board, Monaghan had criticised directors for not making the company more profitable.
Fonterra has grown since 2008 but it is still a long way short of being the $30b company that was predicted at the time the then Labour Government smashed two rival co-ops together with the NZ Dairy Board, via legislation, to form Fonterra.
Will Monaghan survive as chair to steer the company through its next phase?
This is a difficult question. There have been strong moves to bring in new blood at the forthcoming Fonterra elections.
Wilson — who was due to retire by rotation — will not stand again.
It is unclear whether the other two directors who retire by rotation had put their names up again by the time nominations closed on Monday.
There has been widespread speculation that Colin Armer, who is powerful in farming politics and holds a major stake in Fonterra as one of NZ's largest dairy farmers, may have tipped his hat into the ring. Zespri chairman Peter McBride has also been lobbied.
Both these men will add strong ballast to the board if they stand and are elected.
But tipping Monaghan out would prove difficult in the short term.
A replacement CEO for Theo Spierings is expected to be announced in the coming weeks.
Monaghan is now leading that process with the involvement of the full board and the appointment is critical to Fonterra's development.
But Monaghan is having to orchestrate this in an environment where Cabinet Minister Shane Jones is applying public pressure for a Kiwi to fill that role and for top level pay packets to be constrained.
This is by no means the extent of the political involvement that Monaghan must navigate.
As this columnist has earlier revealed, fellow Minister David Parker was deputed by Cabinet to have a face-to-face meeting with Fonterra board members over unproven allegations the company had exceeded its brief during the 2017 general election.
But the most pressing issue is potential change to the Dairy Industry Restructuring Act (DIRA) by the Government after the current review process is finished.
In last week's Herald Agribusiness Report, Monaghan argued an "even playing field" needed to be created. He said the DIRA was aimed to encourage competition in the milk supply market though open entry.
This meant Fonterra has to accept applications to process milk from new farmers. But with 10 companies now operating, open entry was redundant and had the potential to lead to significant excess manufacturing capacity.
Monaghan also argued New Zealand should be seen to back NZ businesses (large or small) and not subsidise overseas companies through having to supply them raw milk at a regulated price. His contention is this makes sense in the domestic retail market.
But there is an issue when Fonterra farmers have to provide their milk to new processors who are "typically backed by foreign capital and global businesses and who export everything they produce".
Monaghan did not name the companies but they include international leader Danone (a French company) and several Chinese SOEs which either have shareholdings in NZ companies like Synlait or run 100 per cent-owned operations here.
Where it gets contentious is with Monaghan's argument that there needs to be a clear pathway to deregulation.
Over the past 17 years the sunset provisions in DIRA have changed — the goal posts keep getting pushed out.
Government Ministers like Damien O'Connor who has oversight of all the prime agribusiness and primary sector portfolios has endeavoured to preserve a veneer of independence while the review continues.
But there are strong rumblings about the very structure of Fonterra — not just from market analysts who would like to see the brands business (added value) spun out and listed so it could bring in more growth capital. But also from some of the more market-minded shareholders.
Monaghan's appointment will not squash these rumblings.
