Farmers' call
OPINION: Fonterra's $4.22 billion consumer business sale to Lactalis is ruffling a few feathers outside the dairy industry.
That's one of the reflections from long-serving Fonterra director Leonie Guiney as she contemplates retirement from the co-op's board this November, having served the maximum nine-year term for Fonterra directors.
Cooperative business models from a major part of New Zealand's economy. According to the New Zealand Institute of Directors, the total gross revenue of New Zealand's top 30 co-operatives represents approximately 20% of the country's GDP.
Farmer or supplier ownership and control is a core tenet of many of these co-ops, so it is critical that a pipeline of strong, capable governors come through each generation to lead the organisations.
Historically, New Zealand had many smaller agricultural cooperatives that provided introductory governance roles for rural leaders, many of whom went on to serve on the boards of our larger agribusinesses. They were breeding grounds for business acumen and governance skills, and as such, more formal governance programmes weren't a natural pathway.
Fast forward 20 years and the amalgamation of these smaller cooperatives into larger entities like Fonterra means the industry now relies on a more formal pathway of training and development to bring forward leaders from within the farmer base.
Formal programmes such as Fonterra's Governance Development Programme, the Kellogg Rural Leadership Programme and Silver Fern Farms/ Farmlands/LIC's 'To the Core' are some of the new avenues for rural governors to build their skill sets.The 'To the Core' programme was started by SFF and is coordinated by Clark Taylor, SFF's shareholder relations manager.
Kylie Leonard, a current Fonterra Co-operative Councillor and Fonterra Governance Development Programme alumni, is one example of the pipeline in action.
A 2023 Nuffield Scholar, Kylie has held a few governance positins both in the non-profit and business sectors. She is a current Fonterra Co-operative Councillor, the 2018 Dairy Woman Community Leader of the Year and was a finalist for Dairy Woman of the Year in 2019.
Leonard says that having directors with a deep connectin back to the farmgate benefits everyone.
"Decisions made by these boards flow onto our individual farming businesses and communities. Directors will still make commercial decisions, but having an appreciation for how they will impact on farmers is critical.
"The nature of farming makes us effective governors. In our own businesses, we're accountable for strategy and performance, managing scarce capital, and making sound judgement calls. Governance requires many of the same skills, just on a larger scale.
"We formed these cooperatives for our mutual benefit, so who better to step up and govern than the farmers and growers that own them," says Kylie.
Applications for the 2025 Fonterra Governance Development Programme open on 9 October and close 1 November 2024.
All Fonterra shareholders and herd-owning sharemilkers supplying Fonterra can apply. A limited number of places may also be made available for members of LIC, Foodstuffs and Silver Fern Farms.
