Australian Wool Innovation has mooted the possibility it may not hold an extraordinary general meeting next month, which was promised to offer shareholders a chance to vote on controversial recommendations handed down by an independent review last July.
During a presentation at Victoria’s Balmoral Merino Sire Evaluation Trial field day, board director Don Macdonald, Dubbo, NSW, told attendees that AWI had conducted widespread consultation on the recommendations of the Ernst & Young review.
With the board agreeing to 75 of the 82 recommendations and expecting to receive the full support of grower representative bodies on the remainder, Mr Macdonald said AWI could gain approval from Federal Agriculture Minister David Littleproud, bypassing the need to hold an EGM.
The minister has previously asked that AWI adopt all the review recommendations.
Attendee Susan Finnigan, Kia Ora Merino stud, Winslow, said she was dismayed by the possibility AWI would cancel the promised EGM.
The EGM was to enable shareholders to vote on five items which were paramount to triggering the Federal Government’s Review of Performance. These related to capping board terms at 10 years, more transparency with proxy votes, moving to a skills-based board, and ensuring the independence of directors.
She said Mr Macdonald’s statement showed a lack of understanding regarding the message from the majority of woolgrowers in voting to reduce the wool levy to 1.5 per cent for the next three years, instead of the peak wool body’s recommended 2pc.
"It appears AWI, AWGA and WPA think they have negotiated their way through this (albeit without major grower/vote approval)," Ms Finnigan said.
“All because of a fear there would not be 75pc approval for the review recommendations at an EGM - now unlikely to be held if the Minister agrees to it all."
Mr Macdonald said since the November AGM, AWI had undertaken an extensive process of industry consultation through its Industry Consultative Committee.
He told attendees, there were “six or seven recommendations” that were unresolved that “went to the core of the DNA of the company - how shareholders elected their representatives”.
He said the process with stakeholder representative bodies already showed that AWI was satisfying one of the key recommendation - that it must consult more widely.
"We are meeting the intent of the recommendations," he said.
He said that if the Minister did not accept the AWI recommendations then an EGM would be held so that shareholders could vote.
"We have met with representatives of shareholders and if that falls apart then we will go to the shareholders themselves," he said.
Changes to the AWI constitution required support of 75pc of shareholders.
If that level of support was not reached, the status quo would remain, he said.
The analysis of the recommendations had taken a lot of “corporate time” and how they fitted with the company and its future.
He said it was important to maintain “the democratic model” of how the board was elected.
“We have agreed to some changes and met half way in some things that the review of performance identified. We have kept the democratic model that ensured shareholders have the final say on who represents them on the board of AWI,” he said.
The board had agreed to 75 of the recommendations which were handed down last July, of which nearly half were completed.
“It has been a rewarding process. Lines of communication have been very good and people sat down at the table with the best intent,” he said.
“We went through the issues one by one and pretty much got agreement that we could address the intent of the recommendations, but keep our democratic model.
“We can’t rule out an EGM as we are still in the process. We will know within weeks if we have everybody’s agreement."
