Tweaks to the rules mean the two directors retiring by rotation, Donna Smit and Andy Macfarlane, will make it through the independent assessment process, having declared their intentions to stand.
Only farmers now have the power to remove a sitting director standing for re-election.
There will be no re-run of the blocked pathway for re-election that prevented outspoken director Leonie Guiney from standing in 2017 when she was not approved by either the assessment panel or her fellow directors.
After legal arguments Guiney tried again last year as a self-nominated candidate and was successful.
But the 2018 election had its own share of controversy when voting farmers failed to approve three of the five candidates for three vacancies.
In the first instance only Guiney and Zespri chairman Peter McBride made the 50% threshold and sitting director Ashley Waugh, Taranaki candidate Jamie Tuuta and Canterbury candidate John Nicholls fell short.
The Shareholders’ Council, which oversees each election, called a second ballot among the three who were unsuccessful the first time. Waugh withdrew and self-nominated candidate Nicholls won a seat.
Waugh’s failure was seen as a farmer backlash against Fonterra’s worst year in financial results and setbacks.
Among the rule changes this year is the dropping of the 50% voter approval so the required number of top-polling candidates will be elected to fill the vacancies.
Another major change is that the independent panel will be able to shortlist and recommend up to four candidates, two more than the vacancies.
An uncontested election means each candidate will still require 50% approval from farmers who vote.
If there is a shortfall then the board can appoint a farmer-director for a year but not one of the unsuccessful candidates.
Those Fonterra farmers who apply to the panel and are not approved can keep their attempt private.
This year the panel comprises Air New Zealand and Fisher & Paykel Healthcare chairman Tony Carter, Mercury and Warehouse chairwoman Joan Withers and Skycity Entertainment, Summerset and Tourism Holdings chairman Rob Campbell.
The self-nomination path will be maintained for candidates with the backing of 35 farmer-shareholders and no limit on the number of candidates.
Council chairman Duncan Coull said the changes in the electoral process followed consultation with farmers by a joint committee of the council and the board.
Farmers wanted as much simplification as possible, protection of the independence and transparency, information about the skills and attributes required by the board and a choice of independently assessed candidates.
The complicated two-path process was first used in 2016 along with the start of downsizing the board from 13 to 11, seven of them to be farmer-directors.
Accompanying illness and resignations meant experienced directors became a minority.
Hence the change in rules to ensure a sitting director seeking re-election cannot be vetoed in the assessment and approval process, which augurs well for Smit and Macfarlane.
Macfarlane has only served two years after his election along with chairman John Monaghan and director Brent Goldsack in 2017.
Because of the constitutional requirement to have two seats vacated and contested this year, Monaghan, Goldsack and Macfarlane came to an agreement that Macfarlane would stand down by rotation.
A five-year review of the governance and representation changes of 2016 will be held no later than the 2021 annual meeting.
The two path have been renamed; the independent nomination process and the self-nomination process.
The nomination period to the independent assessment panel closes on August 16, the announcement of approved candidates will be on September 17, followed by the self-nomination window from September 17 to 27.
