Tuesday, 29 October 2019 10:55

Fonterra to value why it exists

Written by  Staff Reporters

Fonterra needs to know why it exists if it is to create successful strategies, says outgoing Fonterra Shareholders Council chairman Duncan 

Coull says the co-op’s purpose review has been the most defining piece of his tenure.

The council instigated this review in February 2018 after discussions with the board under then chairman John Wilson.

The review sought input from farmer shareholders, employees and customers, highlighting the need to have a purpose that built belief and belonging and also acted as a guide to the culture and the strategic direction of our co-op.

Next week, Coull steps down after nine years on the council, with four-and-a-half years served as chairman. 

He says without knowing why the co-op exists, any strategy, old or new, would be ineffective for Fonterra.

“Without clarity of purpose, no matter how good strategy is or was, we would find ourselves back in this position after not too long,” he told Dairy News.

Coull says the purpose of any organisation is critical in terms of understanding why it exists – how this shapes strategy and what needs to be done to effect the strategy.

“For Fonterra in the first 18 years it could talk very clearly and succinctly about what it did, less so about how it did and very rarely talked about why it did what it did.”

“Purpose is now at the heart of everything we do, why we get out of bed in the morning.

“It is about our co-op empowering our people to create goodness for generations: you, me and us together, and it drives everything we do within this organisation.

“It holds the strategy to account, it holds behaviour to account and drives better outcomes for all of us.

“In the absence of this work we had nothing that was holding our strategy to account.”

At Fonterra’s annual meeting, farmers will be voting on two farmer resolutions seeking an independent review of the council.

Coull and his councillors and Fonterra’s board oppose both motions because the council believes the reviews proposed by the farmer resolutions do not go far enough. 

“There needs to first be a full review of council’s purpose and functions before considering whether council has been effective, or deciding on any changes. The council has itself already called for a full review of the council.”

Farmers behind the two motions say the council’s review will end up as an internal affair, something Coull disagrees with.

He says the council is open to and understands the importance of independence in the review. 

“Our council is excited about the review and working with farmer shareholders. 

“He points out that there has been no clear review of the council’s constitutional function since Fonterra’s formation.

“Our view is that resolutions coming before us are from people who care about the co-op and its future. It’s critical that we all work together.”

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