AUSTRALIAN Wool Innovation chief executive officer Stuart McCullough has been moved sideways to an international marketing role, without a proper executive search and interview process for the position.
AWI today said it is pleased to announce Mr McCullough’s appointment in the new international role of chief marketing and innovation officer, “allowing him to devote his time to the biggest issues facing the wool industry and Australian wool growers.”
In the role, Mr McCullough will be charged with addressing the industry’s greatest challenges, such as the proposed European labelling laws that could severely disadvantage the fibre, as well as maximising the opportunities for wool’s growth as the world comes out of COVID-19 conditions, AWI said.
AWI said the role will ultimately be based overseas, with a final location yet to be determined; however, Mr McCullough formally takes up the position effective today.
Current chief operating officer John Roberts has been named acting chief executive officer ahead of a search process to be conducted by the board to identify a permanent CEO.
Move is “unacceptable” says NSW grower Ingram
The development has raised questions about Mr McCullough’s industry engagement and collaboration record, with New South Wales wool grower Robert Ingram described the appointment as a demotion and indicative of the “absolute chaos” at AWI.
“This is just unacceptable to the Australian wool grower, to give him such a plum job in Europe.
“It is just an abuse of power by AWI.”
Mr Ingram perceived the movement of Mr McCullough offshore as indicating the board did not want to stand him down “at this point in time,” due to the potential for a large severance pay-out.
“The legacy of that is that the new board has to deal with it, and that is a nasty legacy to leave for the new board.”
Former AWGA director and non-mulesed wool producer Martin Oppenheimer interpreted the management moves as the start of a change in the culture of AWI.
“We’ve got to complete the job by changing the board.
“It is really the only hope to save AWI, to change the culture of AWI, as the Agriculture Minister (David Littleproud) said, but we’ve got to finish the job and change the board,” he said.
“It is a poor strategic move to take the pressure off them without having to incur the cost of removing him, which then becomes the legacy for the new board.
“It is failed board strategy, governance and accountability.”
Mr McCullough’s appointment has also raised concerns with Mr Oppenheimer about his likely impact on the marketing of Australia’s non-mulesed clip overseas in the new role.
In 2016 at the International Wool Textile Organisation Congress in Sydney, Mr McCullough said AWI would not engage on the Textile Exchange’s Responsible Wool Standard, which has become the leading international integrity scheme for non-mulesed wool.
“We will not engage with these people who sit at the top of the world and want to impose disciplines on our wool growers that we think farm their properties and care for their animals to the world’s highest standards.
“We don’t think that just because they say they are the world’s highest standard that we should be listening to these people – and will not listen to them,” Mr McCullough said.
At the congress, AWI also opposed open discussion on a resolution from Italy’s wool textile industry for urgent action on sheep welfare standards and mulesing, and the issue was subsequently deferred by the IWTO.
Management changes to create additional wool demand
AWI said the major management changes have been made to create additional demand for Australian wool as major economies emerge from Covid-19.
AWI chairman Jock Laurie said the board had identified a clear need for an international role dedicated to the critical issues facing the industry.
“If you look at the factors that are going to define the success of the wool industry for all growers in the decades to come, many of them are international.
“We need to address issues across the wool supply chain, from processing concentration to ever-changing retail and consumers trends, and we need to continue driving demand for the fibre as the world recovers from COVID-19,” he said.
“Most immediately, we need to resist damaging changes to European Union labelling laws that would fail to recognise wool’s natural, sustainable and renewable benefits.
“What the Australian wool industry needs is a passionate advocate to take up those issues on behalf of the industry, and there is no one with a better skillset and experience than Stuart. It was a logical decision to free Stuart from his other responsibilities as CEO to enable him to devote his time to fighting for the wool growers on the world stage,” Mr Laurie said.
Mr McCullough has more than 35 years of experience in the wool industry, including 20 years with AWI and almost 12 years in the CEO role. In that time, AWI said he has developed a deep understanding of every stage of the international wool supply chain from the farm, through wool processing to the fashion houses. After starting his career as a jackeroo on a sheep farm, the property of current AWI director David Webster, Mr McCullough moved on to management roles engaged in all aspects of the wool industry as a wool classer, international wool exporter, trader and buyer, as well as global sales management roles.
“During my time as CEO, the critical issues for the success of our industry have become clear,” Mr McCullough said.
“While AWI will always support growers on-farm and through its local R&D initiatives, it is the big macro international trends that will have the most significant impact on the industry over the long term.
“I am delighted to take on this new role, where I believe I can make the biggest difference to the future of our industry,” he said.
Mr Roberts said he was pleased to be named acting CEO and would put himself forward as a candidate to take on the role on a permanent basis.
Mr Roberts, who comes from a wool-producing family at Binalong in NSW, has more than 30 years of experience in the wool industry, having worked in a wide range of roles at AWI, Woolmark and in private agribusiness companies, including as a wool buyer and trader. He was appointed AWI COO in October 2020.
Mr Laurie said the AWI board would conduct a rigorous process to identify a permanent CEO from internal and external candidates, with a view to making an announcement in early 2022.
Mr McCullough is the best person for the job – Laurie
When asked why Mr McCullough had been demoted, Mr Laurie said: “This is about better using Stuart McCullough’s knowledge to the best possible benefit of Australia’s wool growers at this crucial time in terms of international challenges and opportunities.
“The biggest opportunity is the opening up of major economies after the lockdowns of COVID-19, the biggest challenge is the proposed changes to product labelling in Europe. Mr McCullough is the best person to focus on these two priority areas,” he said.
He said John Roberts has an extensive understanding of the company and the industry, and has the full confidence of the board.
“Mr McCullough and Mr Roberts will continue to work closely in the coming months to make the transition smooth.”
Mr Laurie confirmed that there was no executive search process for the new international position.
“The AWI board decided this role was needed and that the role should be filled as soon as possible.
“Mr McCullough’s knowledge and experience made him the best person for the role,” he said.
“Mr McCullough will now be 100 percent focused on driving international demand for Australian wool.
“Up until today he has been splitting his time on that as well as the many day to day responsibilities here in Australia,” the chairman said.
Mr Laurie confirmed Mr McCullough’s offshore role is not an attempt by the board to improve the culture of the organisation by moving him sideways into a new role and appointing a replacement.
“No, this about getting the maximum international benefit for Australian growers at this important time.
“Mr McCullough will focus on global demand issues and Mr Roberts will focus on Australian operations.”
Mr Laurie said Mr McCullough’s new appointment was “a decision of the entire board” and had not been encouraged or requested by Minister for Agriculture David Littleproud.
“No, not at all.
“The change in responsibilities is a direct result of the board wanting to deliver more benefits to Australian wool growers.”