Silver Fern Farms seek input on changes to board

Rob Hewett

Silver Fern Farms Co-operative Ltd is seeking feedback from shareholders on proposed amendments to its constitution, which include increasing the number of directors on the board.

At the co-operative's annual meeting in April, chairman Rob Hewett signalled a review was under way.

In an update to suppliers, Mr Hewett said the board had reviewed the constitution to ensure it was "fit for purpose'' following the partnership with China's Shanghai Maling, which was completed in December 2016.

The proposed refinements covered governance development, appointed supplier directors and limits on the tenure of directors, as well as farmer-elected director eligibility and voting eligibility.

It was proposed to increase the size of the co-operative board from a maximum of eight directors (five farmer-elected directors and three board-appointed directors) to a maximum of 10 (up to six farmer-elected directors and up to four board-appointed directors).

The fourth board-appointed director must be a current supplier or have a legal or beneficial interest in a current supplier.

The co-op board appointed five of its directors to the Silver Fern Farms Ltd board, of which three must be farmer-elected directors and two must be board-appointed independent directors.

Mr Hewett said the co-operative was aware some shareholders might consider an increase in the co-op board size to accommodate more farmer-appointed directors unnecessary.

However, it was essential the co-operative had a sound succession plan to ensure active farmer-elected directors were well-equipped and gained governance experience and insight ahead of the appointment to the board of directors of Silver Fern Farms Ltd, which was a large, complex business.

The proposed annual increase in cost - of up to $51,600 - was not significant in context of the size of its investment and the importance of the development of the next generation of governors, Mr Hewett said.

The proposed changes increased suppliers' say in the make-up of the board and also ensured those candidates elected were active shareholder suppliers.

The co-operative saw it had a vital role in developing future leaders for the rural community, not just within Silver Fern Farms but the many organisations that supported farmers.

The proposal was to limit directors to a maximum of three terms (nine years), after which the director was not eligible to be elected for a period of three years. The board would be able to waive that at its discretion.

Only current suppliers, or those that had a legal or beneficial interest in a current supplier, would be eligible to be appointed to the co-operative board as a farmer-elected director.

A national roadshow would be undertaken over the next month to consult on the proposal. Any recommended changes to the constitution required a 75% vote. Voting would close on September 10.