Fonterra shareholders make have to wait until November for results of a review of its Farmer Council. Photo / File
Fonterra shareholders make have to wait until November for results of a review of its Farmer Council. Photo / File
Fonterra shareholders hoping to have something to vote on at this year's annual meeting after an internal review of their controversial $50 million farmer council are likely to be disappointed.
After advising shareholders the review's final report and recommendations will now be closer to late November than August, the reviewgroup's chairman has told the Herald if significant proposals to change the council emerge and need voting on, it is unlikely they will be in time for this year's Fonterra annual meeting - normally in November.
While the delay is being attributed to Covid-19, November will mark one year since the council narrowly fended off shareholder remit attempts to have its performance professionally measured by undertaking to launch its own review.
The delay has disappointed and frustrated shareholders who want the council scrapped, while others are philosophical, saying they would rather the process of deciding the best form of farmer-shareholder representation in New Zealand's biggest company wasn't rushed.
Whatever, it now looks certain Fonterra's farmer-owners will at this year's AGM be asked to stump up another few million dollars to keep the 25 farmer-member council in business next year.
The council's budget this year was $3.2m. In the 20 years since it was formed, it has cost farmers around $50m to operate.
Intended as a watchdog for farmer interests, gripes that it is more a lapdog for the Fonterra board have grown in recent years, inflamed by the big cooperative's $605m net loss last year and advice last year from the council that shareholders had experienced $4 billion of wealth destruction in two years.
Critics say it is redundant in today's business world and note Fonterra employs field reps to liaise with shareholders so there is duplication of work.
Review group independent chairman James Buwalda said a recent survey of shareholders and sharemilkers had confirmed the importance of meeting farmers for face-to-face discussions.
Covid-19 had seriously impacted the group's ability to organise such consultation around the country before calving. The survey findings would be available to Fonterra's 10,000 shareholders by mid-this month and meetings with farmers were planned from mid-September to mid-October, he said.
One shareholder, who declined to be named, suggested the message in the survey results from 1400 respondents had "shocked" the council.
"This is a defer, stall and forget strategy."
Buwalda said the call to delay was the review group's.
"As independent chair of that, I can absolutely assure that it was not influenced one way or the other by the council."
Waikato shareholder Jim Cotman, one of a group of shareholders who, at last year's AGM, proposed the council's performance be professionally evaluated, said the review group could have met farmers in small groups by now, or used technology like Zoom.
"Heaven help Fonterra if this the best we can do. It's shoddy really to go past a year and not come to the AGM with some report. They shouldn't hide behind Covid-19."
Cotman said the report needed to be "done and dusted" by the AGM so shareholders could get on and make change, just as Fonterra itself was changing its business strategy.
But Buwalda said the group, which comprises four farmers, two Fonterra directors and two councillors, had struggled with logistics under Covid-19 restrictions.
"It became impossible to do something that did justice to the expectations of farmers around this review. It was a reluctant decision but in our judgment, the best decision in order to uphold the integrity of the process and ensure farmers can have a proper say in the process.
"The approach we are taking overall is that this review belongs to farmers. Our job is to help farmers participate effectively and contribute their best ... to help decide what the results should be and own the results in terms of their best interests as farmers in the cooperative.
"We couldn't honour that commitment by trying to organise things under the constraints we had."
Buwalda said it was "unlikely" any significant recommendations requiring constitutional change and a shareholder vote would be available in time for the annual meeting.
"If there are such recommendations they have to be considered at a subsequent time. Whether this means held over for another year or some special meeting it's way too early to say."
Waikato shareholder Trevor Simpson, among those who put remits to last year's AGM, said he would await the survey results with interest but he wanted the council scrapped. He and supporters would put another remit to this year's AGM if necessary, he said.
Cambridge shareholder Garry Reymer said he wanted change but "I'd hate to push on without the face-to face discussions".
"I'd rather see it done properly. The council is important in my view as our board gets more and more removed from the shareholder base, more corporate.
"Even what qualifies someone as a Fonterra shareholder gets more removed. We need to keep the power and control and the council going to be more and more important."
Shareholders could always call a special meeting if necessary on the review recommendations, Reymer said.
Review group member Manawatu shareholder Andrew Hoggard said he agreed with the delay call. Feedback from farmers was that the review too important to rush, said the Federated Farmers vice-president.
Buwalda was appointed chairman by the review group. A former horticulture scientist and chief executive of the Department of Labour and the Ministry of Research, Science and Technology, he is chairman of the Ospri Stakeholders' Council.
