Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Appropriate Boardroom Style For New Challenges

Tuesday 22 January 2002 For Immediate Release

Directors Committed To Establishing Appropriate Boardroom Style For New Challenges Of 2002

Fonterra directors are committed to working vigorously to establish a boardroom style that is appropriate for Fonterra as the co-op moves from ‘merger-mode’ to 'fully-operational-mode’, their Chairman John Roadley said today.

Mr Roadley was responding to renewed speculation in the media about the company’s governance arrangements following the resignation last week of one director.

“Every company needs to ensure its boardroom competences and style develop to meet changing commercial challenges, but any suggestion of major governance or control problems at Fonterra are belied by our success to date,” he said.

“In just a year, our board of directors – the majority of who are farmers – have pulled off the biggest and most complex merger in New Zealand business history. In doing so, we have ensured the future security of our dairy farmer shareholders, taking them from an unstable industry structure into a new co-op that has captured the best of our history to create the foundations for greater success in the future.

“We are well on our way to delivering the gains identified in the merger Business Case, and we measure up well against the pre-conditions identified by McKinsey & Company for a successful move to a single-company structure.

“As part of this merger process, the board appointed our Chief Executive and oversaw the appointments of our senior management team which would be the envy of any major dairy company in the world. It has experience and new blood; New Zealanders and overseas talent. We are now well down the track of working through the complex details of bringing three of New Zealand’s largest companies together into one integrated, ‘cow-to-customer’ co-op.

“During the time the board and management have been working on this merger activity, we have successfully kept our eyes on the ball, taking important strategic steps and performing ahead of historical levels.

“We have moved to establish major joint ventures and alliances with the world’s leading dairy and food companies, such as Nestlé, Dairy Farmers of America and Arla. These are progressing well.

more …

“Business-as-usual disciplines have seen us manage the commissioning of some major plant expansion in the South Island, the demands of a very strong milk flow flush around the country and difficult challenges in the international market. These challenges have all been met successfully. Through all these alleged governance problems, not a drop of milk has been spilt in our milk collection and processing activity and not an opportunity has been missed in the market. A record payout was delivered for 2000/1 and we are forecasting an even better payout this season in a difficult international market.”

Mr Roadley said that, despite this success, “every boardroom style must evolve”.

“Our challenge is to successfully transition from ‘merger-mode’ to ‘fully-operational-mode’,” he said. As planned prior to Christmas, Mr Roadley has been working on this over summer with key directors and McKinsey & Company. He has also discussed this with the Chairman of the Shareholders’ Council. Board work will continue through February.

“The last year of merger activity has not been without stress and some tension. Many said it would be impossible to bring three very different companies together, no one thought it would be easy and it hasn’t been. Every board reflects its circumstances, and boardroom styles are shaped by company traditions, personalities and the pressure of events of the time.

“We are all aware that approaches that may have been best for the legacy companies or for the merger process may not be best for Fonterra now that we are moving to ‘fully-operational-mode’. I’m confident that every director wants to work on this energetically.

“Establishing the most appropriate boardroom style for our company at this stage of its development calls for cool heads and reflection. We are fortunate that on the Fonterra board we have directors who are dedicated, competent and able to look forward. Shareholders can be assured that they will not tolerate corporate governance practices that lead to poor performance, conflicts that would be prejudicial to shareholder interests or behaviour that would damage our reputation or value.”


© Scoop Media

Business Headlines | Sci-Tech Headlines


Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>



Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news