The suggestions put forward by the review team generated much comment and debate at consultation meetings throughout the country, directors and shareholders’ councillors report.
The nub of the matter was the loss of contestable elections in return for more appropriately qualified candidates and a multi-layered appointment process.
Many farmers wanted to be able to continue to question candidates themselves and were not wholly happy with a take-it-or-leave-it vote at the annual meeting.
Contrary to that was a groundswell of support for “less politics in selecting the best directors” and confidentiality to encourage prospective candidates.
Candidates would be discouraged by adverse publicity if they were among, say, five who got through the assessment and approval process before farmer voting to fill a lesser number of vacancies.
Politicking would still happen and candidates would lobby the farmer-shareholders with the most votes, an aspect of the current process many were dissatisfied with.
Conversely, if endorsed candidates were rejected by farmers at the annual meeting, confidentiality would assist the replacement process to begin again.
“Ideally, we want well-qualified farmers to put themselves forward for the selection process and if not successful the first time they feel willing to upskill and have another go, rather than being burned off,” former Fonterra Shareholders’ Council chairman and review team member Ian Brown said.
The review team had taken on board farmers’ keenness to hear and quiz the board candidates after they had been selected, before the annual meeting.
“They are keen to meet and quiz them, to eyeball them, as some put it.”
Brown added that the co-operative needed to keep up contacts between farmer-shareholders and their representatives at board level.
He also pointed out the proposed yes/no vote actually lifted the threshold from 25% plus one vote to get elected under the current single transferable vote (STV) system to 50% at the annual meeting.
“But we acknowledge there is a difference between voting for a recommendation and having a contestable election.”
Spaans said his overall impression was that farmers thought the review team’s proposal described a process that was a whole lot better than Fonterra had now.
But they might not be comfortable with everything in a complex, interlinked proposal.
Brown said farmers were happy with the recruitment and assessment end of the appointment process, when the long list was refined to a short one, but there were a range of views at the voting end.
Others were concerned about the potential loss of institutional wisdom in the shareholders’ council if the basic length of service was two three-year terms.
“The council plays an important role in developing leadership although it is not a direct pathway to the board,” he said.
Therefore a stand-down period for councillors before they could seek directorships had been suggested.
Asked if the governance and representation proposal could be tweaked and then put to shareholders with enough confidence to gain 75% approval, Spaans and Brown said yes.
“I don’t think we are far away and the feedback messages, even negative ones, give material for the review team to work with,” Brown said.
The final proposal was “quite doable” in the timeframe and the feedback was consistent, Spaans said.
“Support for the proposal has been heavy and I am confident we will get there.”
