South Island iwi Ngāi Tahu says it’s happy with its nearly 20 per cent stake in Sanford amid growing retail shareholder concern about what’s going on with the seafood company’s board.
Two directors have announced they’re departing in the past week, leading New Zealand Shareholders’ Association (NZSA) chief executive OliverMander to express concern that an NZX-listed company “falls into favouring a particular minority shareholder, albeit a large shareholder in the case of Ngāi Tahu”.
“We are concerned about the impact of those resignations and what is going on behind the scenes and whether that will result in governance processes and structure that don’t support the interests of retail shareholders,” Mander said.
There’s growing speculation with the immediate resignation last week of Abby Foote, and Monday’s news that independent director Fiona Mackenzie would not seek re-election at the December annual meeting, that Ngāi Tahu has its sights on tailoring the board composition to its preference for industry experience.
Sources claim the 19.87 per cent shareholder is targeting independent directors and signalling who it won’t support at annual meetings.
There’s also been speculation Ngāi Tahu has its sights on a bigger stake in Sanford.
But Ngāi Tahu Holdings chairman Mike Pohio told the Herald the tribe was “happy” with the stake, accumulated by September 2021.
“We were very happy buying the stake we bought and we see a bright future for Sanford, and there is no consideration but to see that future proceeding with our existing shareholding,” he said.
Ngāi Tahu voted against Foote’s re-election in 2021 and it’s been reported former director Peter Cullinane, founder of Lewis Road Creamery, opted not to seek re-election to the board last year because Ngāi Tahu planned to vote against him. Former Port of Tauranga chief executive Mark Cairns resigned as a director in February, citing workload as a director of several listed companies.
On the director churn, NZSA’s Mander suggested Ngāi Tahu was a capable investor but did not have much experience in publicly listed companies.
“This is one of their few forays into the publicly-listed environment. That in itself is a whole new capability. There’s some learning to take away for Ngāi Tahu.”
In response, Pohio noted Ngāi Tahu was once a significant shareholder in Ryman Healthcare.
“It was progressively sold down over time but it [Ngāi Tahu] had active support and engagement in that relationship, which was nurtured over many years...”
Mander said Ngāi Tahu was “very big” on wanting direct seafood industry on the board.
Asked if it was correct that Ngāi Tahu was aiming for a board of industry expertise, Pohio said industry experience was a “consideration” for the tribe.
“It’s a consideration we make on all of our appointments to boards, that the right skill set and experience is exactly what is required. It helps the direction of the company and gets engagement with management and other shareholders,” Pohio said.
“It’s a balanced approach we take. In this case, Ngāi Tahu has unparalleled, extensive involvement in the fishing industry and through that long-standing and extensive background we see the value in having directors and management that require skills and experience in the industry.”
NZ Shareholders' Association chief executive, Oliver Mander. Photo / Michael Craig
Further fuelling speculation about Ngāi Tahu’s undue influence on the board has been the appointment of its nominated director Craig Ellison as interim CEO.
Ellison, experienced in fishing industry management and leadership, has a history with Ngāi Tahu companies. He was appointed by the Sanford board after the resignation of chief executive Peter Reidie in August. The company told the Herald it would start a search for a new permanent CEO in the new year.
NZSA’s Mander said the preference is for a CEO not to be on a board. In the majority of New Zealand-listed companies, that was the case. “Around three-quarters of the top 50 company executives are not part of the board.”
To the suggestion Ngāi Tahu could unduly influence the choice of a new permanent CEO, Pohio said that appointment was “the domain and responsibility of the board”.
“We support the appointment of a director on the board. Once they are there they are acting in the interests of the company,” Pohio said.
Foote, on the board since 2018, in a statement to the Herald said: “I am no longer aligned with the view of the majority of the board as to the best interests of the organisation in particular as it relates to actions by significant but minority shareholders which are making it increasingly difficult to govern the organisation in accordance with the expectations of the NZX Corporate Governance Code and my view as to good practice for listed companies.”
Sanford’s annual meeting is on December 18 when Mackenzie, managing director of ANZ Funds Management, exits the board.
The Sanford board currently has just four directors - independent chairman Sir Rob McLeod, Mackenzie until December 18, and independent director David Mair. Mander said this “stretched” number was also of concern to the shareholders’ association, which would be having a conversation about it with the board ahead of the annual meeting, along with other matters.
Mander said shares in Sanford were widely-held and he’d had several calls from retail investors about the board events.
Andrea Fox joined the Herald as a senior business journalist in 2018 and specialises in writing about the dairy industry, agribusiness, exporting and the logistics sector and supply chains.
