Tuesday, 05 May 2020 07:55

Call to scrap Fonterra shareholders body

Written by  Sudesh Kissun
Fonterra farmers, from left, Jim Cotman, Trevor Simpson and Malcolm Lumsden want the Shareholders Council scrapped. Fonterra farmers, from left, Jim Cotman, Trevor Simpson and Malcolm Lumsden want the Shareholders Council scrapped.

A group of Fonterra farmers want the Shareholders Council scrapped.

Read: Fonterra Shareholders Council responds.

The farmers say the council has failed in its fundamental role to keep Fonterra’s board accountable and keep shareholders fully informed of the co-op’s performance and is now not required.

The group, headed by Waikato farmers Trevor Simpson, Jim Cotman, Malcolm Lumsden and Mike Peters, is urging other shareholders to make their views known to a steering committee set up to review the council.

Simpson says shareholders should ask what the council has achieved for them in the last 20 years.

“What have we got for our investment? Bugger…I can’t think of anything,” he told Dairy News.

“There has to be a better, more efficient way of monitoring Fonterra’s performance and keeping the board and management in line rather than having a 25-member toothless tiger.”

The council has an annual operating budget of $3 million. Simpson says farmers have poured around $50 million into the council over the past 20 years with little to show in return.

 “We believe the council has done its dash and it’s time for it to be disbanded,” he says.

Lumsden believes the Shareholders Council is viewed as being more aligned with the board’s perspective rather than the shareholders’ views. 

“A significant ‘red flag’ has been raised through the election process where many shareholders have chosen to ignore Shareholders Council recommendations and instead elected independent candidates on to the Fonterra board,” said Lumsden.

The group feels the council has shielded Fonterra directors from fronting up to shareholders more frequently.

Peters says the link between directors and shareholders has been lost.

“The directors show up during the election process promising to save the world: once they get on the board, we don’t hear from them again.”

Peters says other co-ops like Ballance and LIC have their chief executive making farm visits to meet shareholders. “The board needs to get out and make us feel part of the co-op,” he says.

“Shareholders feel a disconnect between them and the board and management.”

Simpson says the council review is providing Fonterra shareholders the opportunity to start afresh.

“The Shareholders Council’s lifespan is over; it’s time to move on and time to start fresh,” says Simpson.  “We don’t need a big council costing us $3m a year to tell us how Fonterra is performing.

“We believe that shareholders are looking for timely reports from an independent source.

“We’re after a critique of the board’s performance against its stated strategy and KPI’s. Perhaps a small three to five-member shareholders committee could make this appointment.”

Simpson and his group filed a remit at the last Fonterra annual meeting, calling for an independent review of the council. The remit received 24% support, failing to meet the 50.1% threshold to pass. A similar remit by Southland farmer Tony Patterson received 44% support at the same meeting.

At the same meeting the council announced a review of its operations.

Simpson wants farmers to make their views known to the steering committee, which has at least four Fonterra farmer shareholders.

Steering committee member and Federated Farmers vice president Andrew Hoggard tweeted that the review process was going well.

“Looking forward to some good farmer engagement,” he says.

The committee is chaired by former senior government official James Buwalda. Other members are Judy Garshaw, Paul Quinn, John Small, Emma Hammond, Mike Montgomerie and two Fonterra directors John Nicholls and Donna Smit.

More like this

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

Editorial: A new era for two co-ops

OPINION: Farmer shareholders of two of New Zealand's largest co-operatives have an important decision to make this month and what they decide could change the landscape of the dairy and meat sectors in New Zealand.

Should co-op sell its consumer brands?

OPINION: As CEO of the Dairy Board in the 1980s I was fortunate to work with a team of experienced and capable executives who made most of the brand investments that created the international consumer business Fonterra inherited. Soprole in Chile was the largest, but there were more than 20 countries where consumer marketing companies were established and Anchor and other brands were successfully launched.

Featured

'One more push' to eliminate FE

Beef + Lamb New Zealand (B+LNZ) is calling on farmers from all regions to take part in the final season of the Sheep Poo Study aiming to build a clearer picture of how facial eczema (FE) affects farms across New Zealand.

Winston Peters questions Fonterra divestment plan

Foreign Affairs Minister Winston Peters has joined the debate around the proposed sale of Fonterra’s consumer and related businesses, demanding answers from the co-operative around its milk supply deal with the buyer, Lactalis.

National

Machinery & Products

New McHale terra drive axle option

Well-known for its Fusion baler wrapper combination, Irish manufacturer McHale has launched an interesting option at the recent Irish Ploughing…

Amazone unveils flagship spreader

With the price of fertiliser still significantly higher than 2024, there is an increased onus on ensuring its spread accurately at…

» Latest Print Issues Online

Milking It

Tough times

OPINION: Dairy industry players are also falling by the wayside as the economic downturn bites around the country.

MSA triumph

OPINION: Methane Science Accord, a farmer-led organisation advocating for zero tax on ruminant methane, will be quietly celebrating its first…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter