Sharechat Logo

Fonterra resignation spooks Shareholders' Council

By Phil Boeyen, ShareChat Business News Editor

Monday 21st January 2002

Text too small?
The Fonterra Shareholders' Council says it's extremely concerned at the sudden resignation of one of the company's directors after just a few months in the job.

One-time Lion Nathan (NZSE: LNN) director, Mike Smith, has stood down from Fonterra's (NZSE: FCGHA) board, citing concerns about governance.

The dairy giant's Shareholders' Council chairman, John Wilson, admits that the company has been in transition but says the resignation raises serious questions.

"Before the merger, shareholders understood that one of the pre-conditions for the success of Fonterra was getting the governance right. We [the Council] have been talking to the board for some time about the governance of Fonterra - this rings further alarm bells."

Mr Wilson says dairy farmers not only rely on Fonterra for their income, but the nature of the co-operative's capital structure means that they also carry the full risk of business decisions made by the board.

"We've always said that we need first-class governance within Fonterra, which ensures transparency and accountability to shareholders."

Mr Wilson says the Council has already reached agreement with the Fonterra's chairman, John Roadley, to get the governance right so that shareholders can have confidence in the future of the co-operative.

"We have been assured that the board will be meeting very shortly to address these concerns. The board must be able to clearly articulate to shareholders what governance is to Fonterra, what their aspirations are in this area and how shareholders will see that delivered."

Fonterra is New Zealand's largest company and one of the largest dairy businesses in the world. It accounts for around 20% of New Zealand's total export receipts.

Father's Day SOON! Crazy Deals on ALL IRG Yearbooks - More than 50% OFF - $19.99 for 44th IRG Yearbook 2018-2019


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Farming provides economic safe harbour
State power profits below budget
Free flights cost more
Fonterra merges rural companies
Quality mark for juice industry
NZ business in credit rating tailspin
Government rejects power profiteering accusations
'People's Bank' to rate with the big boys
Sovereign fattens ASB's bottom line