Fonterra chairman John Wilson says confidential assessment of director candidates has young farmer support.
Fonterra chairman John Wilson says confidential assessment of director candidates has young farmer support.
Strong support, particularly from young farmers among the 3000 suppliers who have attended meetings around the country on Fonterra governance, has emerged for the board's reform package, says Fonterra chairman John Wilson.
But controversial aspects of the proposed changes - particularly a new process for farmer-director candidate selection - failed to gain traction with older Northland dairying leaders.
Five meetings were held in Northland this week - at Okaihau, Towai and in the Mangakahia Sports Complex at Poroti on Monday, and at Dargaville and Wellsford on Tuesday.
Fonterra has almost 11,000 suppliers, but with some people owning more than one farm the exact number of dairy farmers was unknown, Mr Wilson said.
However the company was happy with the "positive engagement" indicated by the 3000 suppliers who had attended the 45 director and Shareholders Council-led meetings plus local farmer "shed" community meetings during the three rounds of governance discussions held since February.
On June 10 shareholders will vote on whether to reduce the 13-member board to 11 directors, and replacing direct farmer voting for farmer-director candidates with ratification voting at the end of a background nomination and selection process.
Mr Wilson said Fonterra needed to attract the best farmer business people to its board.
Feedback from farmers showed this was not happening with the present selection process, with electioneering bringing politics into the company polls.
"We are proposing a confidential process where board candidates would be assessed by an independent panel and farmers would vote on the panel's recommendations," Mr Wilson said.
"People would be tested by the board and the independent panel to get the best candidates available."
While this governance concept received strong support from "the next generation of farming leaders", according to Mr Wilson, it did not convince former Fonterra director Greg Gent, of Ruawai, who said replacing direct farmer voting for directors with a confidential selection panel undermined the democratic process.
Greg Gent favours direct farmer voting for directors.
Mr Gent, who with fellow director Colin Armer unsuccessfully tried to trim the size of the Fonterra board from 13 to nine directors at the company's annual meeting in December, said he thought 11 was better than 13 and he would tick the current proposal to reduce the size of the board.
He had attended the meeting at Dargaville on Tuesday and came away saying it had been hard to read what farmers were thinking.
But he considered those at the meeting had shown an underlying concern about farmers losing their direct vote for directors as the proposed new process contained a risk of the board cloning itself or putting forward "safe"directors.
Former Fonterra farmer councillor Mark Croucher, of Poroti, was equally unimpressed with the plan to use an "independent" panel to appoint the company's leaders.
Fonterra chairman John Wilson says confidential assessment of director candidates has young farmer support.
"It's incestuous to have a board committee selecting directors," he said.
Mr Croucher approved of plans to bring in first past the post voting and he liked the way the package identified skills needed around the board table.
But he believed the whole governance review had been rushed and had not been debated as thoroughly as the Trading Among Farmers issue.
And if the vote at next week's special meeting failed to reach the 75 per cent majority needed to approve the governance package, Mr Croucher said the board should "have another go at it" rather than mothball the representation issues for another five years.
