Motion to reduce Fonterra board gets majority support
A proposal to reduce Fonterra's board to nine has received over 50% support from shareholders.
Chairman Ian Brown says the resolution, which calls for a minimum of nine farmer-elected directors and a maximum of four appointed directors, was pre-emptive of an ongoing Governance and Representation Review and could cause practical difficulties for the co-op moving forward.
"After careful review of the proposal put forward by Lachlan McKenzie the council recommends that Shareholders vote against it," says Brown.
"The council is concerned the resolution could serve to constrain the findings of the council's and the board's recently-commenced joint Governance and Representation Review and it would not be in the best interests of the co-op to pre-empt its findings.
"If any proposed changes come out of the review, shareholders can be confident that no changes can be made without consultation and a 75% shareholder vote in favour."
Brown says the council respected the rights of shareholders to propose resolutions for deliberation by all shareholders which is why the council will not consider its position on the resolution until after it has had the benefit of reviewing the outcome of the shareholder vote.
"The council is in place to represent and make recommendations in shareholders' best interests and will, where possible, support farmers' rights to have their say," says Brown.
"Because the shareholder proposal would change the constitution it would require a 75% shareholder vote as well as 50% council support for it to take effect."
