Wednesday 12 October 2016 12:35 PM
Fonterra shareholders back new governance model, allowing farmer nominations to board
By Sophie Boot
Oct. 12 (BusinessDesk) - Fonterra Cooperative Group's shareholders have voted in favour of a new governance and representation model, with the key change being farmers can directly nominate their own choice for selection to the board.
Earlier this year a proposed change failed to get the required 75 percent majority vote needed. The reform would have been the first in 15 years for the dairy cooperative’s governance model, though just under 64 percent voted for a long-awaited review.
The new changes reduce the size of the board to 11 directors from the current 13, comprised of four independents and seven farmer directors. They also use a first-past-the-post voting system, replacing the previous single transferable vote model, and an independent nomination process, while adding a self-nomination process that requires the support of 35 shareholders.
At a meeting in Palmerston North this morning, 86 percent of shareholders voted in favour of the constitutional amendments while 88 percent voted in favour of the representation-related amendments to Fonterra's Shareholders' Council bylaws.
Fonterra chair John Wilson said that final vote reflected "shareholder sentiment that the recommendations were a significant improvement and it was time to move the cooperative forward."
"Cooperatives, by their nature, need consensus on the important decisions. That is as it should be and today we have agreed on the final recommendations after a very constructive eight months of discussions and refinements," Wilson said. "It is a clear signal from our shareholder base that it is time to push on so the co-op can focus on our business priorities."
When releasing the first version of the review earlier this year, Wilson said the then-process for electing farmer representatives, which effectively meant candidates only required 25 percent support under the single transferable vote system, was too politicised and they struggled to get the information on candidates they needed to make good quality decisions on who to vote for.
As part of the amendments to the Shareholders' Council by-laws, among the nine recommendations voted on at today's meeting are proposed changes from a working group that recommends reviewing the number of council wards over the next year and considering whether that can be reduced. There are currently 35 wards.