Shareholders’ Council supports TAF – chair resigns

Simon Couper, resigned as chair of Fonterra’s Shareholders’ Council over the Trading Among Farmers proposal:

Couper’s resignation followed a majority vote by the council in support of the TAF proposal, a view which clashed with his own and made his position untenable, he told BusinessDesk.

“I respect the council’s decision,” he said, but was not personally convinced that the scheme would meet the bottom line objective of securing 100 percent ongoing farmer ownership of Fonterra in perpetuity.

“One hundred percent is 100 percent and in my view, we didn’t get there,” he said, after the council completed a due diligence process on the detail of the TAF scheme, which will go to a special shareholders’ vote on June 25.

Fonterra chair Sir Henry van der Heyden said Couper has done the right thing by the co-operative:

The situation was “not ideal”, van der Heyden told BusinessDesk. “But hey, I’m delighted about where the Shareholders Council got to”, with replacement chairman Ian Brown reporting “a very strong” mandate from the rest of the council.

“I don’t know exactly what the number are, but north of 80 percent,” he said.

The numbers are important because at least some of the votes at a special shareholders’ meeting on June 25 to approve TAF will require 75 percent majority support and involve constitutional change. . .

Couper’s resignation notwithstanding, the Shareholders’ Council’s support of the proposal makes it much more likely farmers will support TAF.

The proposal is contentious and is not without risk.

But there is a greater risk to the company in doing nothing about the threat which could come if too many farmers redeem their shares.

 

3 Responses to Shareholders’ Council supports TAF – chair resigns

  1. Meg says:

    I’ve spent the last week sitting through presentations from students here at Lincoln university talking about what the sheep and beef industry in New Zealand needs to do to become more successful. Almost every single one of them was in favour of a large farmer owned cooperative modeled on fonterra to achieve a monopoly of supply and single market entry in the global marketplace. Meanwhile fonterra with the help of government is setting about the first stages of dismantling this highly successful model. TAF needs some significant improvements made to it before it will be in a form which is most beneficial to the farmer shareholders that are the backbone of this company. It is sad to see Simon couper go as he was a strong voice for a number of well engaged and informed farmers. Good on him for standing his ground. Meanwhile mr spierings is attacking any opposition to the proposal rather than engaging with the concerns raised by shareholders. The concerns shareholders have about TAF are fair and need to be addressed.

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  2. homepaddock says:

    Milk and meat are very different products, Meg, I’m not sure what works for the former would work for the latter.

    Did you see Fonterra’s announcement about tightening controls? http://www.fonterra.com/wps/wcm/connect/fonterracom/fonterra.com/our+business/news/media+releases/fonterra+board+wants+to+tighten+trading+among+farmers+controls

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  3. Meg says:

    Sorry Ele missed your comment. Agreed, milk and meat are very different products, but that doesn’t mean that the model used in dairy couldn’t be adapted to benefit the meat industry. I have seen the announcement but still am a little skeptical, the board doesn’t appear to be taking the shareholder concerns seriously enough which is a shame. It will be interesting to see what happens.

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