Last week, chairman Murray Taggart told shareholders that Fonterra director John Monaghan was no longer being considered in the independent director appointment process, and that the board had decided not to increase the number of independent directors from three to four.
In a message from Meat Industry Excellence to farmers this week, Mark Patterson and Mandy Bell, the two Otago farmers who moved and seconded the non-binding shareholders' resolution to have Mr Monaghan appointed, which was passed at the co-operative's annual meeting, said Mr Taggart's letter was ''hugely disappointing''.
''Our shareholders' resolution was never about adding John Monaghan to a list of possible candidates for the board's consideration. It was explicitly about appointing John to the board.
''John's experience in industry reform, belief in adherence to co-operative values and strong communication skills are seen as valuable assets at a time when our co-operative and industry face serious challenges,'' they said.
Shareholders voted accordingly and had ''every right'' to expect their board to respect those wishes.
They encouraged shareholders to contact directors and express disappointment with the decision.
The board was able to appoint up to four independent directors and Mr Monaghan's appointment could have been accommodated without cutting across any selection process the board might have under way for a third director.
Mr Patterson and Dr Bell regarded it as a ''very important governance issue'' in light of the ''very clear'' wishes expressed by a majority of shareholders at the annual meeting.
''Our push to have John appointed to the board was a constructive initiative aimed to lift our co-op and bring to the board table skills in shareholder engagement, change management and industry reform that are vitally needed as we urgently seek to arrest the declining fortunes of sheep and beef farmers.''
They said Mr Monaghan remained committed to standing for the board, despite Mr Taggart's comments that he had withdrawn from the appointment process, and they were determined that he would play a role in the co-operative's future.
ANZ's latest Agri-Focus described described reform of New Zealand's red meat processing sector as ''painfully slow''.
Collectively, meat processors lost nearly $200 million in 2011-12 and most only just managed to ''get back into the black'' in 2012-13.
The prospect of lower slaughter numbers in 2013-14 and stock rebuilding following drought were again going to apply pressure to earnings and weaker balance sheets in 2013-14, economists said.
Addressing over-capacity, especially for sheep meat, and better alignment between farmers and processors, was critical to addressing poor profitability, creating greater supply chain efficiencies and ensuring farmers captured their fair share of the retail value.
''The talk has not been matched by action on this one and it feels like a death by a thousand cuts.''
The election of new directors to the boards of Alliance Group and Silver Fern Farms, likely pressure from financiers, and other industry conversations suggested change was getting closer but what type of change remained to be seen, the report said.
