Fonterra's farmer shareholders to vote on change

The new changes reduce the size of the board to 11 directors from the current 13. Photo / Getty Images

Fonterra's farmer shareholders will vote tomorrow on a raft of changes to the way the co-operative is governed - including reducing the board's size to 11 from the current total of 13 - and indications are that it will be a close-run result.

The package, which also involves a significant change to the way candidates are voted onto the board, will require 75 per cent approval to get over the line and chairman John Wilson said in a recent interview that achieving that level would be a big ask.

The proposals are aimed at taking some of the politics out of the board voting system and attracting the best candidates for the job. As it stands, a candidate can get on the board with 25 per cent support, whereas the new system means candidates will need to achieve 50 per cent support.

Fonterra has held about 400 farmer meetings, drawing in about 3000 farmers nationwide, to discuss the moves.

A motion put forward at last year's annual meeting by farmer shareholders Colin Armer and Greg Gent failed to achieve the necessary 75 per cent support but nevertheless garnered more than 50 per cent of the vote, indicating farmers were in the mood for a change.

The most controversial of the measures is the change to the voting system, which will mean doing away with the current single transferable vote system and adopting a candidate ratification method that will require a board prospect to achieve 50 per cent support.

Wilson said most of the farmer concerns lay around changes to the voting system. "It's a change in the way that we do it, but there is wide acceptance that this represents the best opportunity to attract the best people," he said.

Under the new rules, the board will have seven farmer directors and four independent directors.

Wilson told the Herald last week that getting over the 75 per cent threshold would be a big ask for any organisation. "And it certainly is for our co-operative."

Federated Farmers dairy chairman Andrew Hoggard told the Herald this month that he expected the voting to be close, adding the shift in emphasis from one of voting for candidates to one of ratification of a pre-selected candidates was at the centre of farmer concerns.

"There are a lot of people that like the fact they get to choose the candidates," he said. "It will be bloody close and I would not like to guess which way it goes, but I don't think that it's a given that it will pass."

Internet, postal, fax and proxy voting closed on Wednesday.