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LABOUR SPOKESMAN on Primary Industries Damien O’Connor says Fonterra has been caught short in its crisis management during the botulism scare.
He told Dairy News the co-op’s public relations structure and management have been abysmal, based for years on an assumption that they could manage everything from the boardroom right up to the Prime Minister’s office on their own.
He says Fonterra needs to go back to basics and devise systems that enable them to “act appropriately” when mistakes occur.
O’Connor says he’s concerned about the balance of the Fonterra board – that it contains a growing number of bankers. He’s not convinced farmer shareholders are the problems.
“Perhaps it might be the independents or the mix of the two. It would be unfair to criticise the farmer directors of Fonterra when we have a growing number of directors disconnected from day-to-day farming.
“They’ve now got a responsibility to NZX and I suggest that the fear of unit price or unit values [falling] and responsibilities to the stock market may have led to PR and management decisions that are inappropriate and in hindsight were wrong.”
O’Connor says there is an assumption that the responsibility to the stock market makes everything is more clear and transparent.
“I suggest the exact opposite is true. If you look at some of the corporate failures that have littered the NZX over the last 30 years, that’s certainly the case.”
O’Connor says the true cost of the botulism scare has been grossly underestimated, and that the $2 million allocated by the Government to help companies affected by the fallout is “chicken feed” relative to the investment needed to re-build the integrity of the New Zealand brand.
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