Sharechat Logo

Shareholders send Fonterra back to drawing board after constitutional changes fail to attract enough votes

Friday 10th June 2016

Text too small?

Fonterra Cooperative Group says it will consider amending constitutional changes that would allow it to shrink its board and adopt a new system for electing farmer directors after failing to win support for the measures at a special meeting of shareholders.

The world's biggest dairy exporter said 63.74 percent of votes were cast in favour of the proposed changes to Fonterra’s constitution and Shareholders’ Council by-laws at the meeting in Hamilton, short of the 75 percent support required.

The board and council "will consider adjustments to the recommendations on the cooperative’s governance and representation model with a view to bringing a revised proposal back to farmer shareholders before the end of the year," chairman John Wilson said after the vote. “We owe it to our farmers and to New Zealand to move this cooperative forward by developing a model that gets the best possible talent onto the board in the future. I am confident we can develop a solution which secures a mandate,” he said.

Some farmers have lobbied for a smaller board and the proposal put to the vote today would have resulted in seven farmer directors and four independents, compared to the nine farmers and four independents currently. The chair is elected by the board and would remain a farmer director. The new voting process for farmer directors would have ditched the single transferable voting system, which has been criticised for politicising elections, in favour of a nominations committee putting forward candidates who would need at least 50 percent support to join the board.

Wilson said while the vote failed it showed there was support for change.

"We asked our farmers to consider significant changes to the process for electing directors," he said. "A strong majority, almost two-thirds of our farmers, voted in favour of the recommendation. They want a system that gets the most knowledgeable and skilled candidates on to the board; and a process that encourages diversity and sees our most capable farmer shareholders put themselves forward."

A majority of Fonterra’s farmer shareholders supported a proposal from fellow shareholders and former directors Colin Armer and Greg Gent to reduce the board to nine at the annual meeting last October but that vote also fell short of the 75 percent needed, including a requirement for 50 percent support of the Shareholders’ Council.

BusinessDesk.co.nz



  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:

NZ dollar rises as markets bet on US interest rate cut
Fonterra seeks further changes to dairy act
Tilt, Oji say transmission changes may discourage new generation
Tourism Holdings shares fall to 6-week low as US margins shrink
Venture capitalists split on govt picking winners
21st October 2019 Morning Report
Kiwi dollar steady as markets await Brexit developments
Domestic AGMs, multi-national earnings to provide economic insights
MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower

IRG See IRG research reports