Tuesday, 29 October 2019 07:55

Council ‘not a second board’

Written by  Sudesh Kissun
Outgoing Fonterra Shareholders Council chairman Duncan Coull. Outgoing Fonterra Shareholders Council chairman Duncan Coull.

The Fonterra Shareholders Council doesn’t have the powers to act as second board of directors for the co-op, says outgoing chairman Duncan Coull.

“A number of our shareholders would want us to be something we are not -- a second board,” he told a session of the co-op’s Governance Development Programme in Auckland last week.

Coull says unfortunately not all farmer shareholders understand the limited authority the council has in Fonterra: monitoring how the board is increasing returns to shareholders and growing shareholder value.

He says the council’s primary role is to represent the interests of supplying shareholders to the board through its constitutional function.

It does this by representing its farmers’ views to the board, monitoring board performance through the statement of intentions and ensuring the cooperative principles are preserved

The council is facing criticism from some shareholders for the co-op’s poor financial performance.

A lot of shareholders hold councillors accountable for performance of the board.

But Coull says the council isn’t ahead of the decisions made by the board; “we are behind the decisions”. 

“It makes it very hard for us as a council to influence those board decisions. 

“A fair question is to ask ourselves how effective we have been in delivering these functions.

“The other question we have and need to reflect on is whether we are monitoring the right things. 

“The Statement of Intent monitors output which is past tense by the time we report. 

“In my view, Council would be more effective monitoring culture and behaviours within the organisation. If our behaviours are right then performance has a greater chance to succeed.” 

Future leaders

The Fonterra Governance Development Programme is a one-year programme, running since 2006. 

It helps develop a pool of prospective future rural leaders, providing a stepping stone to leadership and governance roles in the industry.

It’s open to Fonterra shareholders and herd-owning sharemilkers. A few places are also available for members of other co-ops like LIC, Foodstuffs and Silver Fern Farms.  

It is a joint initiative of Fonterra’s board and the Shareholders Council and facilitated by Massey University’s College of Business.

More like this

Weathering the shipping woes

The country's two largest dairy exporters say disruptions to global shipping hasn’t affected their ability to get products to customers.

Strategies at play

Former Fonterra Shareholders Council chairman and Waipu farmer Simon Couper looks at the strategies of Fonterra's competitors to see how the co-op can strengthen its own strategies.



John Deere names new Aust/NZ head

John Deere Australia/New Zealand’s new managing director Luke Chandler says he will prioritise leading the way in technology and investing in strong relationships.

Trade deal delivers new 'rulebook'

A new trade agreement, the Regional Comprehensive Economic Partnership (RCEP), has been described as a new rule book for trade in the Asian region.


Miraka picks up awards

Taupo-based Maori dairy company Miraka took the top honours at this year’s Biosecurity Awards.

Wyeth ready for new challenge

The chief executive-elect of Yili-owned Westland Milk Products Richard Wyeth says he’s looking forward to the challenge of running the…

Machinery & Products

Mixer makes feeding easy

Coolbreene Trust near Taupo is a large-scale dairy operation farming 1150ha, including run-off blocks, within a 10km radius of its…

More colour to light range

Originally available with amber lenses only, Narva’s ‘Geomax’ Heavy Duty LED Strobe Beacon light range has been upgraded with the…

State funding for recycling

Having declared in July that all farm plastics sold in New Zealand will have to be recycled or reused, the…

» The RNG Weather Report

» Latest Print Issues Online

Milking It

Avoiding listeria

OPINION: The company that makes dairy products under “The Collective” brand, and which copped a nearly $500,000 fine for failing…

Greenpeace seeing red

OPINION: Still with Greenpeace, the organisation’s push for a price on agricultural greenhouse gas emissions is gaining momentum since the…

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter