Alliance Group shareholders have been urged to express
their views to board members following the board's decision not
to appoint a fourth independent director.
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
''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
''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
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board, despite Mr Taggart's comments that he had withdrawn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,
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