Just 45 per cent of CEO respondents believe Fonterra has been a success.

The world's largest dairy exporter was created when the previous Labour Government introduced legislation to meld together two competing dairy companies and the industry's former marketing arm, the NZ Dairy Board.

But hopes for Fonterra to become a $30 billion company have yet to materialise, and within the business community there are questions over its structure. Twenty-nine per cent of CEO survey respondents believed that the company had not delivered; 27 per cent were unsure.

See our full Mood of the Boardroom 2015 coverage here:

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The view from the banking top table was adamant. "Fonterra has not delivered on its promise of increasing value-add returns," said one CEO. Another noted Fonterra has successfully sold milk powder into China, like the rest of the world has. "It hasn't diversified its products nor its markets as much as it should have."

It hasn't diversified its products nor its markets as much as it should have.

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A key international agribusiness player said the problems were structural. "I always favoured the dairy industry having a competitive model comprising two major companies rather than a virtual monopoly. No major multi-product export in New Zealand should be in the hands of a single governance board and management team."

Others were more generous. "I believe Fonterra has been a great New Zealand success story," said Spark NZ's Simon Moutter. "But being a global player doesn't mean that they are immune to the forces of a world commodity market. That means upside when those forces are in our favour, downside when they are not."

But there was also plenty of comment that Fonterra was hamstrung by a poor structure. "Remove DIRA (the Dairy Industry Restructuring Act which constricts Fonterra's business) and things will change quickly," said one agri-sector CEO. Said another: "The tide of milk from suppliers has overwhelmed its value-add strategy.

"The capex required to process the tide of milk has weakened its balance sheet."

Several concurred this left Fonterra in a weakened position. "It begs the question why have Fonterra been selling milk powder to global companies such as Danone and Nestle who in turn produce this into value-added branded products -- they are taking the increased margin that Fonterra should be creating?" asked one observer.

The inefficient capital structure had also resulted in economies of scale in drying plants and milk powder logistics, but hadn't enabled Fonterra to invest in value-added, higher margin products.

But others pointed closer to home.

An experienced company chair pointed out that Fonterra -- like other large organisations -- was subject to board decisions which will not always be right. "A perfect storm of some poor decision-making and the commodity cycle will bring poor results. Risk assessment ability?"

A surprising 30 per cent thought the Government should introduce legislation to break up Fonterra into a co-operative processor and commodity producer owned by farmers and a separate well-capitalised company to produce and promote value-added products.

Z Energy's Mike Bennett liked the idea but did not believe the Government should legislate for it. "It should be determined by the owners of Fonterra."

The Warehouse's Mark Powell noted scale could be an advantage, especially on the global stage. "However, scale can lead sometimes to bureaucracy and lack of innovation."

A top dairy player underscored that Fonterra's integrated business creates more value because every factory produces byproducts from the main product which Fonterra also sells." If the business is split, we lose that synergy and value."

Cathy Quinn from Minter Ellison pointed out. "Fonterra belongs to it farmer suppliers. Frankly if they don't want external shareholders, why should that be imposed on them? If they don't think that is in their interests, that is their prerogative."

Fran O'Sullivan