Fonterra resignation 'sad day' for NZ
The shock resignation of farmer-elected director Colin Armer from the Fonterra board is a disturbing loss of a "co-operatively minded" leader from New Zealand's biggest company as it is about to be exposed to merchant bankers and the sharemarket, says a farming leader.
Leonie Guiney, spokeswoman for the vocal bloc of Fonterra farmers opposing the introduction of share trading among farmers (TAF) said she was "gutted" by Armer's announcement today that he was resigning immediately from the board.
His departure, days after fellow board member John Wilson was named to succeed Sir Henry van der Heyden as chairman in December, is understood to have taken Fonterra by surprise.
The company had to scramble to inform the NZX, on which it has bonds issued.
Guiney said Armer's loss was further proof that cooperatively-minded people are finding it increasingly difficult to work in the Fonterra culture.
TAF, part of a capital restructure of the $20 billion annual revenue company, involves offering the public dividend-carrying, NZX-listed units in Fonterra farmers' shares and was narrowly supported by shareholders on a milksolids-supply voting basis at a special meeting in June.
Pressure from Guiney's group and supporters, worried that TAF paves the way for Fonterra to be demutualised, forced directors to do a U-turn on their previous refusal to hold a second vote on TAF. The previous vote was in 2010, when farmers approved the broad TAF concept.
Armer, who features at spot 49 on the latest NBR Rich List with an estimated worth of $200 million, gave no reason for quitting after six years but the Waikato Times understands he unsuccessfully stood against Wilson for the chairmanship.
Guiney said the drain of cooperative-thinkers at Fonterra's board and management level had started some years ago.
"But we are now even more exposed. It is time for cooperatively-minded directors on the board to be strong."
Labour primary industries spokesman Damien O'Connor said he was shocked at Armer's resignation.
"I understand he was a contender (for the chairmanship). At a time when there is a call for a deputy chairman to be appointed I would have hoped someone of his experience would have stayed on to fill that role.
"He is a big farmer, but a true framer. I fear this is the first of a number of steps that may see the cooperative influence at board level slip away.
"It's a sad day for Fonterra, for the cooperative and for the country."
Van der Heyden and Wilson could not be contacted for comment. Farmer watchdog the Fonterra Shareholders' Council had no immediate response.
Fonterra's board is made up of independent and farmer-elected directors but its constitution dictates its chairman must be a farmer.
- © Fairfax NZ News
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