Fonterra shareholders and ex-directors Colin Armer, Greg Gent push for slimmed-down board
By Paul McBeth
Oct. 13 (BusinessDesk) - Fonterra Cooperative Group shareholders and former directors Colin Armer and Greg Gent are
calling for the world's biggest dairy exporter to trim its board in a resolution they want voted on at this year's
annual meeting.
The pair have put forward a notice of proposal to cut Fonterra's number of directors to nine from the current 13 in a
bid to lift the cooperative's performance and improve its governance, they said in a statement. The proposal would need
50 percent of the Shareholders' Council to support it, and 75 percent backing from Fonterra's shareholders, and would
reduce elected directors to six from nine, and appointed directors to three from four. They say a smaller board would
increase efficiency and decision-making.
"Lack of confidence in the company is now causing serious milk erosion to competitors and the commerce performance of
the co-op is at an unacceptable level on both the dividend and the share price," Gent said. "Continuing along the same
path and hoping for a different result is unrealistic. So in our view a fundamental change is needed at the board
level."
Earlier this year Fonterra director and former chief executive of Commonwealth Bank of Australia Ralph Norris said he
would retire at this year's annual meeting.
"In recent times we've seen a couple of high calibre appointed directors depart early, and we need to ask why," Gent
said.
The Shareholders' Council today announced Murray Beach, Greg Maughan, Blue Read, Nicola Shadbolt, Ashley Waugh and John
Wilson will stand for election or re-election to Fonterra's board, after the candidate assessment panel completed its
assessment.
Armer said Fonterra's promise to review governance and representation three years ago hasn't amounted to anything, and
that the 13-strong board installed when the cooperative was formed was a "pragmatic number which facilitated the
merger."
By way of comparison, New Zealand's largest listed company Auckland International Airport has eight directors sitting on
its board.
The proposal to trim the Fonterra board won't target anyone seeking election, and would require the Shareholders'
Council to hold an election for the six elected directors in March next year.
Armer said the proposal has received "overwhelming support" in their discussions with their fellow shareholders.
"We think it's vitally important to have a high functioning board of directors that drive a fitter, leaner company that
is globally competitive," he said. "At the moment, we don't believe that's possible under the current board structure."
Neither Armer nor Gent will seek election to the board. Armer was a director from 2006 and 2012, and Gent was on
Fonterra's board from 2001 to 2011.
"Our proposal is based on our knowledge and experience of boardroom dynamics," Armer said. "Our process has been
designed to make sure that shareholders retain the absolute power to elect the candidates they regard as the best
candidates for the job."
(BusinessDesk)