The company now has clarity on what it is aiming for, whereas in the past there might not have been true alignment between processes and purposes.
Going back to the shareholder value report commissioned by the council last year it was obvious the course of the co-operative had to change, Coull said.
On the farmers’ side there was no appetite for putting more money into the company to fund a value-add strategy.
“The co-op exists to look after New Zealand farmers and NZ milk and the new strategy is very aligned with that.”
The big calls in the changing strategy are generational and it is now very important to discuss the capital structure.
Fonterra must hold on to its milk supply and be relevant to the next generation of farmers.
Existing shareholders will identify and align themselves with the strategy, Coull believes.
“We are now heading in the right direction but it will take some time for the changes to unleash the company’s earnings potential.”
He welcomes the key financial indicators and the three- and five-year targets that will form part of performance payments for senior executives.
“That will add levels of comfort and accountability, something the council will be reporting on in future.”
