Fonterra shaves 50c off forecast milk price
Fonterra has dropped its forecast milk price mid-point by 50c as a surge in global milk production is putting downward pressure on commodity prices.
McBride says the board will be reduced from 11 to 9 only if farmer shareholders give their green light at the co-operative's annual general meeting later this year.
"At the end of the day, farmers will decide, and we will respect their decision," he told Dairy News.
McBride doesn't expect too much opposition to the proposal.
A media report recently named appointed director Clinton Dines and farmer director Leonie Guiney as the directors who could be forced to leave next year to allow for a nine-member board.
But McBride says nothing will happen until farmer shareholders approve the proposal. Fonterra directors will discuss the proposal with farmers during a round of shareholder meetings planned for later this month.
Fonterra directors retire by rotation; next year McBride and Guiney, who both joined the board in 2018, come up for re-election. Guiney had previously served on the board between 2014 and 2017. Fonterra's charter states that a director should not serve more than nine years "unless the board considers that special circumstances exist to warrant an extended tenure".
Guiney, a South Canterbury farmer told Dairy News that she supports reducing the board size.
"It's future focused and will help ensure board dynamics are optimised to best serve our farmer owners," Guiney says.
She says the recent media story implied "dysfunction in the Fonterra board, which is simply not the case today".
"Since my re-election to the board of Fonterra, I have experienced a culture that encourages constructive dissent and where all directors' contributions are welcomed and respected.
"More importantly, the result is better outcomes for Fonterra."
Under the proposal to reduce the board size, farmer shareholders will remain in control of the board. The current balance between farmer elected and appointed directors would be maintained - with a composition of six farmer elected directors and three appointed directors.
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Fonterra chairman Peter McBride. |
"As is the case today, the chairman would still be selected from within the pool of farmer elected directors," says McBride.
McBride says as part of earlier governance and representation reviews, a commitment was made to review the board size and composition in 2024.
"Since the co-op's formation, it has been envisaged that the board size would be rationalised over time.
"With the capital structure review, asset divestment programme and long-term strategy work lately behind us, the board believes it is the right time to review its size and composition."
