Friday 05 August 2016 12:55 PM
Fonterra Shareholders' Council to get clearer mandate
By Paul McBeth
Aug. 5 (BusinessDesk) - The Fonterra Shareholders' Council, which represents farmer interests in the world's biggest dairy exporter, is poised for a refreshed mandate with clearer guidelines on how it interacts with the milk processor.
The council and Fonterra Cooperative Group are seeking feedback from farmers on a series of proposals to update the group's governance to make the council's role clearer, explain how it works with Fonterra's board and management, and improve communication with farmer shareholders. Farmers are expected to vote on any changes to the council's governance at a special meeting in mid-October.
"In general, there is a need to provide more clarity of the role of the shareholder councillor and council, including their role as the cornerstone shareholder," the discussion document said. "This will lead to a more accurate perception of individual councillor performance and their collective ability to effectively represent farmers' views to the board and management."
Fonterra planned to change its constitution and create a new system to elect directors while slimming down the size of the board after reviewing its governance arrangements. The proposals fell short of the required 75 percent support at a special meeting in June, and Fonterra said it would tweak its proposals with a view to having a revised proposition for farmers before the end of the year.
The document said it aims to have everyone within the cooperative understand the role of the council and setting measures to gauge the council's performance to improve clarity and accountability, create broader understanding of how the council and the board work together, and separate council communications from Fonterra's board and management so they "become a trusted and preferred channel of information for farmers".