Fonterra Begins CEO Search Following Miles Hurrell Resignation
Fonterra chief executive Miles Hurrell has resigned after eight years in the role.
Read: Fonterra knocks off 5c from last season’s payout.
Fonterra Shareholders Council chairman Duncan Coull expressed his “absolute disappointment” with the board decision.
In a strongly-worded statement, Coull says the board and management have some challenges ahead in rebuilding confidence through consistent performance and prudent management of shareholders’ capital.
“Having effectively retained an extra 20-25 cents council will seek to understand how this will be used and to what extent it will influence our gearing and credit rating as the strength of both is fundamental moving forward.
“The board and management can look forward to some very challenging discussions with council over the coming weeks and we will be seeking a very clear understanding of the plans that are being implemented in order to restore confidence in the shareholder base.”
In a rare move, Fonterra has reduced last season’s milk price by 5c to 6.70/kgMS. While it has retained the previously announced 25-30 cents guidance range for the dividend, it has indicated that the 10c/share dividend paid in April will be all farmers and investors will be getting for buying Fonterra share units.
It says this is being done to prop up the co-op’s balance sheet.
Coull says while he can understand the board’s rationale and that it is prudent to protect the balance sheet, “but the fact that we find ourselves in this situation is unacceptable”.
“While council acknowledges that part of governance is managing risk, another key responsibility is to createlong-termm value for shareholders.”
