Fonterra watchdog vows better communications
The Fonterra Shareholders Council has got the message that its communications with farmer-shareholders have not been up to scratch this year.
Council chairman Ian Brown, addressing yesterday's annual meeting of New Zealand's biggest company at Mystery Creek near Hamilton, said "farmers told us we did not get this right" and improving its communications performance would be a council priority.
But Brown said there was an obligation on all shareholders to read and understand information and documents from the council on Fonterra matters.
The council, formed in 2001 when Fonterra was created from a dairy industry mega-merger to safeguard the interests of shareholders and monitor the performance of the dairy giant, has soured its relationship with some farmers during the farmer-owned co-operative's prolonged debate over the introduction of share trading among farmers (Taf).
The council has been called a "lapdog" of the Fonterra board of directors instead of a watchdog and out of step with farmers, because it supported Taf by 97 per cent when farmers in a June special shareholders' vote only narrowly passed its introduction.
However, Brown's predecessor Simon Couper resigned as council chairman earlier this year citing concerns about aspects of Taf, which involves the offer of units in Fonterra farmer shares to sharemarket investors.
Despite criticism of the 35-member council, shareholders yesterday approved its budget of $4 million for the next year. Brown said this was around $400,000 more than last year's budget. The council's funding comes from Fonterra.
A review of governance and council representation of shareholders is under way by Fonterra board and council members. The council has eight new members after this year's farmer elections.