Proposal to cut Fonterra's board shot down
The highly anticipated resolution to reduce the size of Fonterra's [NZX: FCG] board from 13 to nine has been voted down by farmer shareholders.
At the co-operative's annual meeting, the resolution gained 54.38% of the vote from shareholders. It needed 75% of the vote to pass.
Before the result was revealed, former Fonterra director Greg Gent – who with Colin Armer tabled the resolution – told shareholders the resolution would "improve Fonterra's governance."
Mr Gent iterated neither he nor Mr Armer were planning on standing for re-election to the board. "Our sole aim is to promote a fitter, leaner, more agile Fonterra."
The board urged shareholders to vote against the resolution.
If it passed, the resolution would have meant an amendment to Fonterra's constitution meaning there would be no more than six directors elected by shareholders and three directors appointed by the board.
Messrs Gent and Armer have been campaigning to cut the size of the dairy giant’s board for a number of weeks.
Mr Armer has previously said that, having served on Fonterra’s board and on boards of other companies, “it became starkly obvious how other companies can function a lot better with smaller boards.”
Both Fonterra's shareholder council, and chairman John Wilson have opposed cutting the size of the board. Mr Wilson says it's just "not the cooperative way."
He says the board had begun a review with the council which would go to a special vote mid next year.
Recently elected director Ashley Waugh is understood to be a supporter of the resolution.
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