Editorial: Well Done, Miles!
OPINION: In 2018, when Fonterra’s board tapped Miles Hurrell to step in as interim chief executive, the co-operative was in the doldrums.
Any farmer shareholder can these days pose any question to Hurrell via Twitter.
A lot of farmers were unhappy when Fonterra two weeks ago slashed its dividend forecast by 10c/share, with a consequent drop in the share price. Many asked tough questions of the co-op.
For example, Waikato farmer Megan Webster took to Twitter to vent her frustration. In a tweet to Hurrell (the first Fonterra chief executive on Twitter!) she bluntly asked “are you just trying to make your job/s hard? I thought one of the prerogatives of Fonterra was to reduce the gearing ratio? Selling off assets and eroding shareholder wealth simultaneously may not be the way to do it? Just saying....”
Hurrell replied, “Hi Meagan, you’re right... reducing our debt by $800 million is one of my priorities and, yes, the potential sale of Tip Top and B’mate will help us achieve it. Very mindful of the impact yesterday’s announcements had on share price. Working hard to deliver for farmers and unit holders.”
One year ago, the idea of Fonterra’s chief executive communicating directly and publicly with farmer shareholders did not exist. Hurrell’s predecessor Theo Spierings preferred to let the former chairman, the late John Wilson, front up to shareholders most of the time.
To his credit, Spierings did front up to shareholders during the routine round of farmer meetings but always with the chairman at his side.
The new chairman John Monaghan prefers to take a back seat and let Hurrell deal with farmers.
Fonterra’s communications strategy with shareholders has raised eyebrows in the past. Now Hurrell ushers in a new era where getting a response from the chief executive is a mouse click away.
But for farmers, open communications is just the beginning. They want to see the co-op return to profitability and start paying a decent dividend on the millions they borrowed from banks to buy shares.
Hurrell is promising change but wants shareholders to give him time. Farmers seem to ready to do this.
There’s a positive vibe among farmers with Hurrell confirmed as the co-op’s chief executive.
Now they will be watching with interest when Hurrell outlines some of his plans next week. A positive interim result and tangible moves to reduce debt and improve returns to unit holders will go a long way to cementing the warm relationship Hurrell is developing with farmer shareholders.
