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Outspoken Fonterra critic launches campaign for board seat

Monday 24th September 2018

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Outspoken former Fonterra director Leonie Guiney, who was temporarily gagged by the cooperative after losing her seat on the board last year, is seeking re-election in November.

Guiney, who has strongly criticised the strategy that led to Fonterra investing approximately $1.5 billion in now-failing assets like Beingmate and China Farms, is one of two self-nominated candidates. There are three official board nominees, and three places available.

Guiney was on the Fonterra board from 2014-2017 but wasn’t put up for re-election last year and has since been embroiled in a legal stoush with the dairy giant. The company gained a court injunction preventing her from talking to the media. In return, Guiney launched defamation proceedings against the directors, who had accused her publicly of leaking and misrepresenting details of board discussions.

The case was settled out of court last month, with Fonterra meeting Guiney’s costs.

Guiney, who has described herself in the past as a "necessary antidote to 'group think'" on the Fonterra board, told BusinessDesk she would bring business nous, investment discipline and “skin in the game”, if elected.

The Fairlie dairy farmer calls herself a “townie from Wellington” who started in the dairy industry in 2002 as a contract milker with husband Kieran. The couple now own six farms and have 3,000 cows.

Leonie Guiney says she knows she is up against some “big hitters with long institutional backgrounds” in the fight for Fonterra board places, but believes that’s in her favour. “I’m not one of them. I’m managing a business. I’ve got my own capital at risk.”

Other nominees include Zespri chairman Peter McBride, Māori Trustee and Maori TV chairman Jamie Tuuta and sitting Fonterra director Ashley Waugh.

Accusing Fonterra of some “pretty shoddy stewardship of capital”, Guiney says she wants the company to shift its whole strategy away from investments, like Beingmate and China Farms, which she says are “beyond our capability”.

“It makes no sense trying to compete against our customers, like Nestle and Danone. Instead, we should be trying to optimise our strengths, like in the ingredients business and high-value products.”

What makes her think she can make a difference to strategy this time, when her previous tenure as a Fonterra director was during a less-than-stellar time in the cooperative’s history? Guiney says the recent announcement of a $196 million loss for the July 2018 year means the board can no longer refuse to change.

“I think Fonterra has been forced to a position where we have to be open about errors made in past. The balance sheet is stretched, so we have to make hard calls. We haven’t got the ability to defend the strategy any more. I have the opportunity to make a difference.”

She believes she can work with other board members, despite the court cases and previous bad blood.

“I think that’s going to be a strength, now it’s settled. That’s history and the issue is about transparency. Whether I’m liked or not, my ability to be effective will be enhanced.”

Now she’s on the ticket, Guiney says she will start her campaign to win dairy farmer support, travelling up and down the country for the next six weeks.

Fonterra directors are chosen by a shareholder first-past-the-post vote, with the poll closing on Nov. 6, and results announced later that day.

(BusinessDesk)

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