Fonterra is to reveal proposals to refresh its governance structures.
Fonterra is to reveal proposals to refresh its governance structures.
Fonterra's board and shareholders' council successfully opposed a remit to shrink its board at last year's annual meeting and the outcome of this week's first-ever governance overhaul may hold that line while proposing other changes to ensure the best spread of boardroom skills.
New Zealand's biggest exporter is scheduled torelease a set of proposals to refresh its governance structures - both at board and shareholders' council level - tomorrow, with the aim of putting any proposed changes to its structure before shareholders for a vote in May. Auckland-based Fonterra has not changed its governance since being set up 15 years ago, although it undertook a full review in 2013.
A majority of Fonterra's farmer-shareholders supported a proposal to reduce the board to nine from 13 at the annual meeting last October but the vote fell short of the 75 per cent needed, including a requirement for 50 per cent support of the shareholders' council, who echoed the board's view that a better option was to make any changes under a governance review already under way.
"I'm pretty happy with the status quo. I don't see a major change coming," said Wayne Langford, a farmer in Golden Bay and vice-chair of Federated Farmers' dairy industry group. "The review has been very good for helping farmers understand the structures within Fonterra."
Langford unsuccessfully stood for the council last year and said he would like to see the council "step up" to address issues with Fonterra's board.
But shareholders and former Fonterra directors Colin Armer and Greg Gent, who drove the calls for a reduced board, say governance tweaks won't cut it.
"Tweaks don't solve very much at all when people want substantive change," Gent said. "Our number one goal would be to get a single-digit number of directors."
Federated Farmers dairy industry chair Andrew Hoggard said it was a challenge to draw the right skills from a pool of farmers but that was offset by the need to preserve farmer representation. "This is a co-op so it is about having that touchstone to farming reality," he said.
