PRESSURE is mounting on former Australian Wool Innovation chairman Wal Merriman to resign from the company’s board, after his shock resignation from the leadership role was announced last Friday.
The Australian Wool Growers Association today congratulated Wal Merriman for 10 years of passionate service to the wool industry as AWI chairman, but said he should retire completely from the board.
Meanwhile, the AWI board’s election of Mr Merriman’s former deputy Colette Garnsey to replace him has prompted Minister for Agriculture and Water Resources David Littleproud to seek a meeting with the new chair “at her earliest convenience.”
Mr Merriman is a former director of AWGA, which lobbied to get him elected to the AWI board in 2004. However, he lost the support of AWGA and of the peak grower body WoolProducers Australia, following several controversial AWI decisions and statements, and more recently an Ernst&Young review critical of AWI’s governance and performance.
Notably, Mr Merriman last year escaped AWI board censure by an investigation conducted by Ms Garnsey and fellow director Meredith Sheil, despite being exposed as observing behind a one-way mirror a focus group of fellow Merino breeders, without their permission.
Mr Merriman has not answered calls from Sheep Central recently, but has always maintained he would stay on the AWI board as long as he had shareholder support — even in the face of the EY review recommendation that the AWI board institute a 10-year director term cap, which would have ended his tenure and that of two other board members.
However, rather than give Mr Merriman their full support as chairman until he was due for re-election in at least another year, the other AWI board members last week accepted his resignation and put Ms Garnsey in as chair, with scant explanation for Mr Merriman’s decision.
Ms Garnsey told ABC Radio last week that Mr Merriman’s resignation was “completely his decision”. However, Sheep Central has learned Mr Merriman resigned after consulting with fellow board members who had been intensively lobbied by wool growers in recent weeks. The growers were concerned about the implication of Mr Merriman and the AWI’s board continued resistance to governance changes recommended by the EY review. The AWI directors were also told the AWI board’s insistence to seek shareholder consideration of crucial proxy, director tenure and independence, and board nomination committee changes suggested by the review at an extraordinary general meeting next year, without board endorsement, might only delay industry change and lead to continued disruption, due to the difficulty in getting the required 75 percent voter approval.
Last Friday, Ms Garnsey said one of the company’s highest priorities was “responding to, and actioning”, the 82 review recommendations. However, the AWI board has failed to completely commit to implementing all of the review’s governance and performance changes as requested by Mr Littleproud, risking legislative action or forced compliance through AWI’s Statutory Funding Agreement with the Federal Government.
Merriman remembered for his marketing initiatives
AWGA chairman Rob McBride said as a former AWGA director, Mr Merriman would be remembered for helping start valuable marketing programs for wool, to tell wool’s story.
“We are proud of his achievements and wish him all the best for the future.”
However, AWGA believes as Mr Merriman has stepped down as AWI chairman, it is appropriate he retire completely from the AWI board immediately and allow for new leadership to evolve at AWI.
This is critical to avoid his directorship being seen as a potential “shadow chairmanship”, Mr McBride said.
AWGA also expects the new AWI board leadership to adopt all 82 review recommendations in its board charter, “without the need for a costly and divisive EGM in 2019”.
“The Australian wool industry is ready to work together and move forward.
“We have such an advantage in the world textile industry with the best natural fibre, produced in a unique natural environment,” Mr McBride said.
“AWGA is ready to help work with industry to begin the AWI long-term 10-year strategic plan, five-year Woolpoll interval and to re-align AWI’s research planning with Meat & Livestock Australia, which currently only happens every 15 years.”
‘Man overboard’, but will it be enough?
Long-time AWI critic, Western District wool grower and garment manufacturer Peter Small compared Mr Merriman’s resignation to the well-known political ‘man overboard’ ploy, whereby one member is sacrificed for the benefit of “the whole of what is left”, maintaining the status of the institution.
“They realised they had to let some steam go and Wal’s way was to get the person he wanted in as chair, which he has done.
“If it got out of his control that might not have happened,” he said.
“The board stays intact, which is what he wants, and he stays on the board, sitting on the side telling everyone else what to do anyway.
“He has possibly placated the Minister, the farmer organisations, the press and everyone else too,” he said.
“I think it is just a classic ‘man overboard’ myself; that was my original assessment when I first heard the news.”
However, Mr Small did not agree with AWGA’s call for Mr Merriman to leave the board.
“Because all they will have done is rearrange the deck chairs on the Titanic, that’s not the problem.
“I’ve always said and I stand by it: Wal is not the problem,” Mr Small said.
“The problem is the culture of organisation, and you won’t change that unless you change not only the whole board, but the whole company and what it is established to do.
“I wouldn’t be calling for Wal’s resignation or anyone else’s; I think the whole thing should go.”
WoolProducers Australia chief executive officer Jo Hall said WPA thanks Mr Merriman for his contribution as chair of AWI.
“We’re sure he’ll continue to contribute as a director of the AWI board.
“WPA congratulates Ms Garnsey on her appointment as chair and we look forward to working with her in the interests of woolgrowers and the wider industry.”
Ms Hall said WPA had repeatedly said it expects all 82 recommendations from the EY review report to be implemented as soon as possible to improve the governance and operations of AWI and to ensure that they are as transparent and accountable to their levy payers as possible.
“The recommendations made by EY as an independent consultant will go a long way in improving the governance and operations of AWI, which is why they must be implemented.”
New South Wales wool grower and former AWI director John Keniry said Mr Merriman’s resignation was an interesting development.
“Let’s see if it has any impact on the way AWI operates.”