Wednesday, 17 October 2018 13:34

Purpose, strategy before structure

Written by  Pam Tipa
Peter McBride. Peter McBride.

Zespri chairman Peter McBride says he has highly transferable and unique skills and experience to bring to the Fonterra board table.

He is stepping down from his governance career with Zespri in the new year.

Also chief executive of dairying and kiwifruit operation Trinity Lands, McBride says there are concerns about some Fonterra decisions and direction.  “We can either throw rocks at Fonterra or we can try to make a positive contribution.”

He says in a governance role with either Zespri or Fonterra “you are making decisions that impact on farmers’ and families’ livelihoods and that is quite profound”.

“It is quite different from a normal corporate governance role. I am passionate about the wellbeing of rural New Zealand generally.

 “It is fundamental the company treats its shareholders and farmers with respect.” 

McBride says he has dealt with big challenges in the kiwifruit industry and his international experience is unique. 

“I had to lead the Psa response, I had complex issues in China and we have been through significant constitutional change.”

McBride says he has been involved in the development of a world leading brand and has useful insights.

“In key attributes they are looking for capability, leadership, governance, international experience, consumer brand experience and financial acumen. I bring all of those to the table.”

He will be interested to see the work on Fonterra’s purpose because purpose defines strategy, he says.

“While directors have a fiduciary responsibility, I believe that acting in the best interests of New Zealand dairy farmers is acting in the long term interest of the company, that is the lens that I look through in terms of purpose and the strategy should flow from that.”

Fonterra obviously has balance sheet issues and complex issues in China, he says.

“You need to get the process right. You need to understand your purpose but also your comparative advantage -- what you are the best in the world at, narrowing down your business and giving it more focus. 

“Many people see the structure as the problem. I don’t really see that. The issue stems from the performance of the company first; structure always follows strategy. The key issue is to redefine the strategy first to make sure it is right for the company and the farmers.”

From a personal perspective McBride says he is an independent person. “I am not a sycophantic sort; I will challenge everything.

“My role as chairman at Zespri is quite different from the role of a director. 

“I am my own person, I don’t represent any group and I am not interested in industry politics. I am interested in performance and outcomes.” 

McBride says it is easy to define problems but “much harder to look for solutions and make a positive contribution and that is the way I operate.”

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