Fonterra Shareholders Support Board Changes

Friday 26 July 2002

Fonterra Shareholders Support Board Changes

Fonterra’s chairman John Roadley said Fonterra’s shareholders had endorsed all of the proposals to improve the governance and operation of the company when voting at the special meeting of shareholders held today.

“All of the proposals put forward by the Board of Directors and the Shareholders’ Council required the support of 75 percent of shareholders voting, and each of the five resolutions received that,” Mr Roadley said.

The key issue to be voted on was the composition of Fonterra’s Board. Resolution 1 provided for an election by shareholders to reduce the number of Shareholder Elected Directors from 10 to 9, and Resolution 2 was to allow for a fourth Board Appointed Director (independent director) to be appointed.

“After considerable debate throughout the company and a lot of work on our governance at the Board level it is pleasing that we can now move forward with a settled governance structure that will provide a greater depth of skills to the Co-operative, “ Mr Roadley said.

Mr Roadley said while the voter turnout was reasonably low at 18.9% including proxy votes, it was important that shareholders had the opportunity to vote on governance. “A lot of the heat had gone out of this issue over the past nine months as Directors have talked with shareholders, and as reflected by the vote there was general endorsement of the proposals. As New Zealand’s largest company it was also important that Fonterra was seen to address any concerns and show leadership on this issue.”

The results of the special meeting were:

Resolution 1.
To provide for an election by shareholders to reduce the number of Shareholder Elected Directors from 10 to 9 by 16 December 2002. Supported 78%

Resolution 2.
To allow the number of Board Appointed Directors to be increased from 3 to 4. Supported 79%

Resolution 3.
Changes regarding requests for separate designation for suppliers from same farm dairy, annual statements to shareholders, restrictions on transfer of shares/transfer to a sharemilker, and re-election of retiring director (disapproval vote). Supported 90%

Resolution 4.
Changes to the rights and obligations of the Shareholders’ Council Supported 96%

Resolution 5.
Changes to the Shareholders’ Council By-laws regarding the timing of elections for each ward. Supported 97%

Mr Roadley said that the director-reduction election provided for in Resolution 1 would be conducted by December 16 2002 unless for other reasons, such as retirement, there were only nine Shareholder Elected Directors at that time.

Ends

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