Fonterra election process criticised
Election processes that denied Fonterra director Leonie Guiney a potential second term were criticised by farmers at the co-op’s annual meeting in Hawera on Thursday.
Guiney was elected to the board in 2014 and had sought a further term but her nomination was blocked by an independent selection panel set up after a review last year.
The Fairlie farmer retired from the board at the meeting, where several shareholders were critical of the selection process and an apparent lack of diversity it created at governance level.
Manaia farmer Harry Bayliss said the new process, which rates nominees against a ‘‘skills matrix’’, had led to a significant drop-off in diversity and was a backwards step for the co-op.
‘‘There are an increasing number of accountants, it would appear, and we do need to maintain the diverse nature of the board,’’ he said.
‘‘If we’re absolutely honest, we’ve lost 10 years of opportunity both as a company and as shareholders.’’
Bayliss expressed concern Guiney had been disregarded after a short period of time, ‘effectively for questioning in an incisive and objective way’.
‘‘I believe that the individuals concerned should consider their future and make themselves available [for re-election] at a later date.’’
Fonterra chairman John Wilson said significant work had gone into developing both the skills matrix and the election process over the past two years.
‘‘The importance of diversity has been something that has been talked about lot,’’ he said.
Feedback throughout the review had been encouraging and the election processes put in place reflected a desire to provide every opportunity for increasing diversity, Wilson said.
Addressing the audience of about 300 farmers, Guiney said she had been committed to seeing Fonterra management allocate time and capital in proportion to where the co-op could best compete and succeed.
‘‘Farmers need to be confident the board is asking the same questions that they would if they had access to all the information that we have access to,’’ she said.
‘‘And that is where our new election system does create a risk. It creates a risk to democratic control of capital.’’
Shareholders needed to be sure not to surrender their business sense for corporate slogans at governance level, Guiney said.
‘‘An elections system that does give the committee and board the tools to remove their colleagues does have implications over time on courage, bluntness and honesty in a board,’’ she said.
‘‘You need all three sometimes with challenging investments.’’
Farmers had a champion in Fonterra and retaining control of that was up to shareholders.
‘‘If you allow the erosion of control, erosion of ownership will ultimately follow,’’ she said.
‘‘It is, from a governance perspective, in shareholders’ hands to ensure that you have the option to elect governors in future who can give a clear steer to management on why we exist.’’
If you allow the erosion of control, erosion of ownership will ultimately follow. Leonie Guiney