Fonterra's farmer owners have abundant director choices this year

Fonterra's head office in Fanshawe St, Auckland. Photo / File

For the second year since reform of Fonterra's director election process eliminated the opportunity for the board to meddle, shareholders will have plenty of governor material to choose from.

Six candidates will vie for two director seats.

Former director Nicola Shadbolt is returning for another shot and incumbent Brent Goldsack is seeking re-election.

Last year, five hopefuls stood for two director seats.

The two director vacancies this year are created by the retirement of chairman John Monaghan and Goldsack's rotation.

Shadbolt, well-known to shareholders as a director of the farmer-owned cooperative and New Zealand's biggest company from 2009 to 2018, and Waikato dairy farmer and finance investment specialist Annabel Cotton are self-nominated candidates.

This means their candidacies were each supported in writing by 35 shareholders, and they did not participate in Fonterra's director assessment process by an independent panel.

Goldsack, retiring National MP Nathan Guy, Cathy Quinn, who stood unsuccessfully last year, and Mike O'Connor are the other candidates, emerging from the panel assessment.

Reform of the director election process in July last year followed the end of farmer-shareholder patience with board meddling in candidate selection - real or perceived, insiders said at the time.

The changes put the power to choose directors more firmly in the hands of its farmer-owners, they said.

One of the biggest changes was the removal of the controversial opportunity for board members to have a say on candidates who had already been through scrutiny by an independent selection panel.

The changes meant all candidates recommended by the panel would go directly to ballot after the dropping of the board's so-called nominations committee, which previously had a say after the panel. The Fonterra Shareholders' Council, which runs director elections, doesn't get a say any more either.

Other notable changes were the independent selection panel having to put forward two extra candidates over and above the spaces available, and incumbent directors seeking re-election could be removed by shareholders.

While then-council chairman Duncan Coull said it would be wrong to link the changes with last year's election when for the first time in Fonterra's history a second director election was needed, he conceded shareholders had lost confidence in the election process.

Fonterra has up to 11 directors: seven supplier-shareholders and four independents appointed by the board.

Fonterra's elected directors must be shareholding milk suppliers to the cooperative. Photo / File

Cotton, an experienced director, accountant and member of the new NZX Regulation board said she chose to "back myself" after the independent assessment panel didn't support her last year.

Shadbolt, a professor in farm and agribusiness management at Massey University, is chairperson of Crown research institute Plant & Food Research and her off-farm career has involved working in government, agribusiness, consultancy, education and research in New Zealand and overseas.

She reportedly said last year she had "unfinished business" on the Fonterra board.

The four candidates to have passed the panel's muster are: former agriculture minister and retiring MP Nathan Guy; Goldsack, a former managing partner at PwC, Rabobank director and three years on the Fonterra board; Mike O'Connor, majority shareholder and head of the dairy farming Spectrum Group; and Cathy Quinn, a former corporate lawyer now company director who unsuccessfully sought election last year.

The assessment process by independent panellists, veteran directors Tony Carter, Joan Withers and Rob Campbell, is confidential so it is not known how many, if any, other candidates put themselves forward for assessment.

All candidates must be an owner or shareholder in a dairy operation that has shares in Fonterra, a farmer-owned co-operative.

Monaghan will be succeeded as chairman in November by Peter McBride, a former chairman of global kiwifruit marketer Zespri and head of dairy and kiwifruit operator Trinity Lands. Fonterra also appoints non-farmer directors but the chairperson must be a shareholder.

Voting for Fonterra's 10,000 shareholders is under the "first past the post" system and closes on November 3. Results will be announced later that day.