AUSTRALIAN Wool Innovation’s board has identified several issues from the recent independent AWI review that shareholders will need to vote on, AWI chief executive officer Stuart McCullough said at the weekend.
At the Australian Sheep and Wool Show at the weekend, Mr McCullough said there was certainly a range of “things” the board had identified that will need to go to a constitutional vote.
The independent performance and governance review of AWI by EY has made 82 recommendations to improve the board, election, governance and consultation structures of the body.
Key recommendations include maximum 10-year board terms; moving to a skills-based board; improvements in election and proxy transparency, strategic planning, communication with stakeholders and stakeholder engagement, and; independent investigation of breaches of the code of conduct by board members.
No comment from Merriman and McCullough on board cap idea
Recommendations from the review which are expected to be resisted by some AWI directors — including chairman and 13-year board veteran Wal Merriman — include the director term cap of 10 years and changes to the board nomination committee to boost its independence.
At the Australian Sheep and Wool Show on Saturday, Mr Merriman, would not comment on which review recommendations would need a shareholder vote or whether he would support a 10-year board term cap. Mr McCullough also would not detail which “things” he was referring to.
By the 2018 AWI annual general meeting on November 23, Mr Merriman will have served for 14 years as an AWI director and David Webster and Meredith Sheil will have each served 10 years.
When Sheep Central suggested some board members might resist a 10-year cap on director terms, Mr McCullough said the directors were not in the position for “the paycheck at the end of the month.”
“They are certainly very successful in their own right and do their work on the board to serve the wool growers.
“I’ve spent the last couple of days here (at the show) with people coming up a little confused and bewildered actually about why we are in such a good place after all this time that there is some sort of pressure to change what we’ve got,” he said.
After the review report’s release, Mr McCullough said AWI acknowledged there were areas where it could enhance the way it operated and “we look forward to improving delivery of our services to Australian wool growers, and the teport provides a detailed roadmap to assist that process.”
At the sheep show, Mr McCullough said AWI was seeking corporations law advice on the review items to see whether they do have to go to a constitutional vote.
“Here’s where these things could belong: it could be constitutional change, it could be an amendment to the board charter, it could be an amendment to the statutory funding agreement, it could be an amendment to policies and procedures, it could changes in the strategic intent document – the strategic plan, or it could be changes in the operating plan.”
Review will cost AWI ‘millions and millions’
Mr McCullough said AWI might already have about 60 different policies and procedures.
“The review means that that is going to more like 80 or 90 policies and procedures – so we are working through them.
“But there are definite things that will require input from shareholders by way of a constitutional vote,” he said.
“The board can‘t change the constitution without the will of the shareholders and that’s a 75 percent ‘will’ on the day; they can’t do that with the stroke of a pen.”
AWI had commissioned Herbert Smith Freehills as its corporations law firm to work with the board to determine “the best place for these items,” he said.
Mr McCullough said the AWI board would have “better legal counsel” on the AWI review’s 82 recommendations by its next meeting in late August.
He said expected the cost of meeting the review’s requirements to AWI would total several million dollars.
“I would think by the end of the year it would have cost wool growers millions and millions.”
Mr McCullough said his priority was to keep moving through the AWI review report and buffer staff to keep discharging projects for the betterment of wool growers.
Minister for Agriculture and Water Resources David Littleproud has said he supported EY’s call for AWI ti immediately implement the review’s recommendations and in a consultative manner.
“I expect recommendations requiring constitutional change to be ready for this year’s AGM in November,” he said.