By Rebecca Howard
Nov. 6 (BusinessDesk) – Fonterra Cooperative Group shareholders have effectively delivered a rebuke to the sitting board by voting to elect outspoken former director Leonie Guiney to the board while failing to support two of three board nominations.
Zespri chairman Peter McBride was also elected to the cooperative’s governance team, but board-backed Maori commercial leader Jamie Tuuta and an incumbent director, Ashleigh Waugh, both failed to gain the 50 percent support required for election to the board, as did self-nominated candidate John Nicholls, leaving one board seat unfilled ahead of Thursday’s annual meeting in Lichfield.
Guiney, who has strongly criticised the strategy that led to Fonterra investing approximately $1.5 billion in now-failing assets like Beingmate and China Farms, was on the Fonterra board from 2014-2017 but wasn’t put up for re-election last year and has since been embroiled in a legal stoush with the dairy giant.
The company gained a court injunction aimed at preventing her from talking to the media. In return, Guiney launched defamation proceedings against the directors, who had accused her publicly of leaking and misrepresenting details of board discussions.
The case was settled out of court last August, with Fonterra meeting Guiney’s costs. She lives and farms near Fairlie, where she is the director of four dairy farming companies.
In an interview with BusinessDesk in September, she said she wants the company to shift its whole strategy away from investments, like Beingmate and China Farms, which she says are “beyond our capability”.
The dairy giant is expected to update shareholders at the Nov 8 annual meeting on its asset review, announced after it reported its first full year loss in its 18-year history. At the time, chairman John Monaghan said the company was doing a “full stocktake and portfolio review looking at all our major investments, assets and joint ventures to see how they are performing and where they fit with our strategy”. Beingmate was a key investment under the spotlight.
Fonterra spent $750 million acquiring 18.8 percent of Beingmate in 2015. It wrote down $405 million of that in the 2018 year, along with taking a $34 million hit for a share of the firm’s operating losses. The stake is now worth $204 million.
McBride lives at Te Puna and has farming interests in the Waikato and Bay of Plenty. He recently announced that he will step down as chairman of Zespri in February.
A second election must now take place for the third, unfilled director position, with timing to be announced.
The board may appoint a director to fill the vacancy until the next election, but may not appoint an unsuccessful candidate.