3 Wool sale meltdown spat Vol 17 No 30, July 30, 2018
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Fonterra vacuum exposed Hugh Stringleman
J
hugh.stringleman@nzx.com
OHN Wilson’s immediate resignation as chairman of Fonterra because of ill-health has exposed the lack of experience among its directors because of the downsizing of the board that began in 2016. It is a double concern for company leadership stability because chief executive Theo Spierings is also resigning this year after six years, the same length of service as Wilson as chairman. Wilson has been a director since 2003 and was the inaugural chairman of the Fonterra Shareholders’ Council from 2001 to 2003. The next longest-serving director, John Monaghan of Wairarapa, has already been elected by his fellow directors as the replacement chairman. He was the only realistic candidate, based on experience and the complicated process of Fonterra’s director elections, already under way for this year. Monaghan, also a former Shareholders’ Council chairman, was elected in 2008 and was reelected by farmer-shareholders for his fourth term last year. Four of the seven farmerdirectors are serving their first three-year terms and would arguably lack governance experience to be chairman, which is a full-time role with a prime ministerial-sized salary. They are Ashley Waugh, elected in 2015 and up for re-election this year, Donna Smit (2016) and Brent Goldsack and Andy Macfarlane (both 2017).
Apart from Wilson and Monaghan, the only other longserving director is Manawatu dairy farmer and academic Nicola Shadbolt (2009) who is also up for re-election this year but has not yet indicated if she will stand. Nominations to the independent nomination process closed on July 23 but the candidates will not be disclosed publicly until September 10. If elected by fellow directors to the chair it would have given her an unfair advantage over other candidates in the contest. If she is not standing, she would have been only a temporary chairwoman until the November annual meeting, at which time Wilson will also be standing down as a director. The chairman is subject to reelection by fellow farmer-directors after each annual meeting. The four independent or nonfarmer directors are also new to the job and under Fonterra’s constitution they cannot take the chair. Shareholders’ Council chairman Duncan Coull said Wilson navigated Fonterra through some difficult periods and changes for the good. “Although it seems premature to do so, because he will be a director until November, I want to acknowledge John’s hard work and legacy as well as the sacrifice made by his family so he could do a very time-consuming and demanding job.” Coull said it was co-incidence rather than continuity that Monaghan was also a former council chairman. The appointment of new chief executive is a board matter and not for Fonterra’s chairman alone and Monaghan and other directors
Continuing as chairman when I cannot put my full energy and attention into the role is not appropriate.
GONE: Ill health has forced Fonterra chairman John Wilson to step down immediately after 17 years of service to the farmer co-op.
had been closely involved. The council will find out the identity of the new chief executive about 12 hours before it is announced in accordance with Stock Exchange regulations and Coull expects that will be weeks rather than months away. Fonterra said no further details will be provided on Wilson’s serious health scare and surgery. In a message to farmers Wilson said the decision to stand down as chairman was difficult but ultimately in the co-op’s best interests. “I have made a very good recovery and am well but will need ongoing treatment. “As many of you will know from experience, governance roles are incredibly rewarding but equally
demanding on the individual and their families. “Continuing as chairman when I cannot put my full energy and attention into the role is not appropriate.” Wilson faced extra pressures when NZ First Leader Winston Peters and Regional Economic Development and Forestry Minister Shane Jones called for his resignation in June after Fonterra posted a first-half loss and cut earnings and dividend expectations. He made no public response at the time. Monaghan, aged 63, grew up on a dairy farm and has farming interests in Wairarapa and Otago. He has served on multiple committees, chairing several of them.
“He has taken a lead role in representing Fonterra’s interests on customer visits and global trade issues and has strong networks both domestically and internationally with key stakeholders,” the Fonterra statement said. Wilson could leave feeling proud of his role in guiding the co-operative in a time of volatile international markets and a host of local challenges, Federated Farmers said. “He has done a tremendous job and gives 100%,” dairy section national chairman Chris Lewis said. “He has always been fiercely supportive and proud of his cooperative farmer-shareholders and the work they do.” RAV-SOL30JUL-FW
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