FORMER Australian Wool Innovation chairman Wal Merriman and his supporters have won AWI board backing for a share of the undirected proxies at the company’s 2019 director election, sparking fears of a lack of desire for culture change at the company.
AWI today declared its board has determined that undirected proxy votes will be shared equally between new candidate Dr Michelle Humphries, Mr Merriman and existing AWI director David Webster.
The decision of the board has led election candidate Noel Henderson to suggest it looked “like a set up” to get Mr Merriman elected and back into the chair of the marketing, research and development company. Mr Merriman stepped down last year, putting Colette Garnsey in the role, after 10 years at the AWI helm.
“There has been some speculation around that for a while and it is going to be hard for us (the other candidates).
“The fact that two of the retiring directors have been nominated again is a clear indication they don’t want change,” Mr Henderson said.
Mr Henderson said the 2018 EY review of AWI’s performance and governance identified that significant cultural change is required at the company for the expectations of all stakeholders to be met.
Mr Henderson, along with Ms Humphries, Mr Merriman and Mr Webster, was recently recommended to shareholders as meeting the board’s skills requirements by the AWI’s board nomination committee. The Victorian Merino breeder said it is unusual that board did not decide to recommend the splitting of the proxies four ways.
Another director candidate in the 2019 election, former director and NSW wool grower Paul Cocking, also believed the AWI board support for Mr Merriman, Mr Webster and Ms Humphries looked like a set-up for the former chairman to resume the top job.
“I think the BNC process was very undemocratic and I really question why they even need the BNC and especially if it is going to act this way.”
He believes there was too much board interference with the board nomination committee.
“There are bigger issues with the board election process and board tenure yet to be sorted out.”
Wal Merriman says he will not stand for chair if elected
However, Mr Merriman has confirmed if elected, it would be for his final four-year term and he would not accept any nomination to stand for the role of AWI chair.
“This will be my last term if I get elected.”
Mr Merriman said if elected and there was a spill motion for the chair role, he would “certainly not” accept a nomination to stand again to lead the board.
“There will certainly have to be a vote, because there will be one new person at least and maybe two or three.
“I think we are very lucky to have Colette Garnsey be our chair of AWI.”
Mr Merriman said if elected, he will focus on trying to find various young people for succession “and that will be it.”
Humphries supports Mr Merriman’s re-election
Mr Webster is well-known as a strong supporter of Mr Merriman on the board and in the industry, but could not be contacted today. However, Ms Humphries admitted that Mr Merriman signed her nomination form and she supported him standing for re-election.
“I support decisions and issues rather than people, I suppose.
“It’s sort of a blanket statement saying I am a Wal Merriman supporter,” she said.
“I support his renomination for the board and I think he has a valuable contribution still to make to the board.”
Up until recently there was a testimonial from Mr Merriman on Ms Humphries’ Livestock Breeding Services website. Ms Humphries said the testimonial was removed as part of the site’s re-construction.
When previously asked if she would support Mr Merriman’s nomination for the AWI chair role if he was re-elected, Ms Humphries has said she supported the current chair Colette Garnsey. This has not changed, she said today.
“I am very happy with Colette and I can’t see this scenario coming into play.”
South Australian wool grower and former research Janelle Hocking Edwards said the AWI board recommendation of candidates Humphries, Merriman and Webster was disappointing and did not reflect a board looking to change.
“It doesn’t look like the board nomination committee process has worked like it should have.”
Board candidate and NSW sheep breeder George Falkiner said he expected the board to recommend Mr Merriman, Mr Webster and Ms Humphries for proxy support. He believes the board should have also recommended Mr Henderson to be consistent with the board nomination committee decision.
“It’s not fair to him.”
Mr Falkiner thought AWI board nomination committee chair Dr Mary Corbett did a good job and the process would have had to be free of political interference by the board.
“I think you will get more of the same if those three people are re-elected – that’s why us other directors are standing; because we want change and we want to improve the culture of AWI and get some more communication going with growers.
“Nothing that has happened surprises and it is not going to stop us running our campaign.”
AWI AGM papers posted today
Australian Wool Innovation said its shareholders are now entitled to vote on the resolutions to be put the company’s annual general meeting following today’s despatch of the formal notice of meeting (NOM) and proxy forms.
As part of the distribution of the NOM, all AWI shareholders have been provided with a copy of the independent Board Nomination Committee’s (BNC) Recommendations to Shareholders report, which details the selection process for director candidates and the committee’s recommendations. The BNC assessed each candidate against the required skill set identified in AWI’s Statutory Funding Agreement.
As previously foreshadowed, the NOM includes disclosure of the chairman’s intentions regarding undirected proxies from shareholders. The AWI board has determined that undirected proxy votes will be shared equally between the following three candidates, listed in alphabetical order: new candidate Dr Michelle Humphries, existing AWI director Mr Wal Merriman and existing AWI director Mr David Webster.
Although the BNC recommended four candidates for elections to the board, the AWI Constitution stipulates that proxies can only be directed towards a number of candidates equal to the number of vacant board positions – in this case, three, AWI said.
Ms Garnsey said she believed the three director candidates had the optimal skills and experience to serve on the board of the company.
“Consistent with the BNC’s independent recommendations, these three candidates will provide the appropriate and necessary balance of skills required by the AWI board and will allow for appropriate succession planning and a harmonious transition of skills on the board.
“A board composition that is diverse in both experience and outlook is what is required to enable the company to fulfil its responsibilities to shareholders and stakeholders and to deliver the outcomes of the 2021 Strategic Plan,” Ms Garnsey said.
“This is a democratic process and provides all AWI shareholders the right to have their say.”
AWI shareholders are entitled to vote for any of the eight director candidates who are standing for election to the board at the AGM. The three candidates with the most votes from shareholders, in person and by proxy, will be elected to the three vacant director positions.
There is again a resolution on the AGM agenda to restrict the size of the board to seven persons, and the commentary here about a three candidate vote is on the assumption that this resolution is passed.
To vote by proxy, shareholders must complete the online or hardcopy appointment of a proxy form by selecting their proxy in section A on the form and then following the voting directions on the form. They must complete parts D and E to ensure their proxy will be properly directed.
All completed proxies must be received by AWI no later than 10am (AEDT) on Wednesday November 20, 2019.
For shareholders who wish to vote in person, this can be done by voting at the company’s AGM on Friday 22 November 2019.
AWI said the role of all AWI directors is to represent their shareholders – the wool growers of Australia – and their interests. Decisions are taken on how and where to invest growers’ funds in research, development and marketing, with an objective of increasing the long-term profitability of wool growing for Australian wool growers, the company said.