Alliance defends rejected director decision
The Alliance Group board is being accused of running scared in the wake of its decision to reject John Monaghan's nomination in the upcoming director elections.
Monaghan is a director of Fonterra and a former chairman of Fonterra Shareholders' Council.
He was rejected by the board on the basis that his interest in Ngapara Farms in Otago - which is a substantial Alliance shareholder - was too small.
Meat Industry Excellence Group adviser Ross Hyland said the Alliance Group board had a "last man standing mentality".
He told farmers at the Beef+Lamb Mid Northern North Island farmer council annual meeting at Karapiro the directors were "running scared of MIE".
However, Alliance Group company secretary Danny Hailes fired back, calling the claim "bull....".
"A person either meets the criteria or they don't. If they do, the board has no discretion whether or not to accept."
Hyland said the MIE nominated Monaghan to try to break the Alliance board's status quo.
Farmer shareholders should be deciding who sits on the Alliance board, not the board members, he said.
"All MIE is trying to do is what they believe in the bottom of their hearts is a passionate plea for change."
Hailes said the board had received four nominations for their director elections and all of them received the same scrutiny.
"The board went through and considered each of the four nominations against the eligibility criteria in the constitution and nothing else."
All nominees had to adhere to clauses 17.9 of Alliance's constitution, which was adopted by shareholders in its current form in December. The clauses outlined four criteria of eligibility for people to become Alliance Group director.
"In the case of Mr Monaghan, he met three of the criteria, but not the fourth," Hailes said. This criteria was in clause 17.9B, which said a person must have either directly or indirectly a beneficial interest in 5000 or more Alliance Group shares.
MIE chairman John McCarthy said it was astonishing the board would reject a candidate of Monaghan's calibre based on the size of his shareholding.
"The decision is made even worse given that it was Alliance farmers who talked John into standing. They asked him to help the meat industry achieve the kind of turnaround the dairy sector had accomplished."
McCarthy said that while technically and constitutionally correct, this whole process was a slap in the face for the co- operative members of Alliance.
"In my opinion this smacks of patch protection. It is patently at odds with any normal democratic expectation, and essentially robs shareholders of the right to meaningfully choose the future direction of their co-operative."
He said the decision was made worse because Alliance chairman Murray Taggart was himself standing for re-election.
"It's not a good look. They say he wasn't involved in the decision, but he should have been out front convincing his fellow directors to let farmers decide."
Hailes said that was a ridiculous argument.
"Their statement actually declares to the world that it is both technically and constitutionally correct, yet it somehow suggests we should be doing something else."
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