Tuesday, 15 October 2019 07:55

Shareholders Council ‘asleep at the wheel’

Written by  Sudesh Kissun
Tony Paterson. Tony Paterson.

A group of Fonterra farmers want an independent review of the Fonterra shareholders council following the co-op’s financial debacle.

Read: Farmers are flabbergasted to learn that Fonterra borrowed money to pay dividends over the last few years.

A resolution for Fonterra’s upcoming annual general meeting was emailed last month to the co-op’s director governance, risk and audit Anya Wicks.

Lumsden farmer Tony Paterson, the mover of the resolution, told Dairy News that he expects the resolution to be included in the co-op’s notice of meeting going out to farmers this week.

The resolution wants the independent review to be conducted “immediately post” the 2019 annual meeting, to be held this year at Invercargill on November 7.

Paterson says the review should look at how the council can be “a more effective cornerstone shareholder”. It will also consider if the current model is working for farmers and is there a better model.

Paterson says he emailed a group of farmers for their feedback after the co-op reported a second year of losses.

“100% of the feedback said they were disappointed with the council’s performance.”

Paterson says most farmers agreed the “council had been sleeping at the wheel”.

Paterson, who has milked 1200 cows for the last 10 years, says Fonterra’s performance has been below par and that more effective monitoring from the shareholders council could have prevented the co-op’s slide into red.

He says shortly after filing his motion of resolution with Fonterra he received a few phone calls from council chairman Duncan Coull.

He was surprised to see an email from the council announcing an internal review. Paterson says the council’s review is “too little, too late”.

“Our bottom line is that it should be an independent review and not another one conducted by the council.”

Paterson wants Fonterra shareholders to be given the chance to decide whether the council is fit for purpose and wants farmers to back his resolution for an independent review.

“We encourage farmers to support the resolution for a better Fonterra we will all be proud of in the future,” Paterson said.

Coull told Dairy News that he understands a resolution will be tabled at the annual meeting.

“The notice of the meeting has yet to be released to shareholders so it wouldn’t be appropriate for me to comment,” he said.

“All I can say is that the council announced a full review of its purpose and functions a couple of weeks ago to shareholders, given that no meaningful review has taken place since Fonterra’s inception.”

In his email to farmer shareholders on October 1, Coull said recent feedback from shareholders clearly suggests it is time to look at representative functions. 

“We have heard the criticisms and frustrations and have been reflecting on them,” he wrote.

Coull says the council’s review will look at its structure and functions under Fonterra’s constitution.

“Our cooperative is the sum of all of us. It has taken generations to build and it is our collective responsibility to empower it for future generations. We trust you will all support this approach.”

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