Fonterra shareholders approve new governance structure
Fonterra shareholders have overwhelmingly voted for a new governance structure that will see its board shrink and changes made to the election process for farmer directors.
At today’s special meeting in Palmerston North, 86% of votes were cast in favour of the governance recommendation, meeting the 75% support required under Fonterra’s Constitution.
“It is a clear signal from our shareholder base that it is time to push on so the co-op can focus on our business priorities,” chairman John Wilson says.
The new structure means the board will be cut to 11 directors, down from 13.
As well as the board size being reduced – which was first raised at Fonterra’s annual meeting last November – a new selection process for the board will come into effect.
Under this process, candidates are selected by an independent selection panel, then approved by the nominations committee of the board and by the Shareholders’ Council before they are put forward to shareholders for their vote and support.
There is also provision for candidates to stand outside this process and self-nominate, provided they are supported by 35 other shareholders. A first-past-the-post majority voting system will mean all candidates now need at least 50% farmer support.
Under a previous attempt to change its governance structure, Fonterra had suggested a system where farmer nominations would have been vetted by an independent selection panel, a board nominations committee and the Shareholders Council with no provision for candidates to stand outside the process recommended.
This was the main area of contention when Fonterra proposed changes to its constitution in June, where the amendment to the constitution gained less than two-thirds of shareholder support.
The process was criticised by many as “challenging fundamental democracy,” Mr Gent told NBR.
Last week, Mr Wilson pleaded with shareholders to vote in favour of the changes.
“This is a big step to ensuring we have the best people to lead our co-operative into the future. Now it’s up to farmers to have their final say so we can move forward and give our full attention to making the most of improving global markets,” he said.
The processes of making the changes to the co-operative’s governance structure had been under way for almost a year.
Asked if farmer shareholders should back the proposed changes to Fonterra's governance structure, 68% say they should with the remaining 32% disagreeing.