A Fonterra shareholder says its new chairman is a yes man and a board puppet, who will not take the dairy co-operative forward.
This morning Fonterra confirmed long-standing chairman John Wilson was stepping away from his role leading Fonterra’s board of directors, citing a health issue.
Foundation Fonterra shareholder Russ Rimmington said Wilson’s replacement, John Monaghan, would be a continuation of the same leadership seen under Wilson, which has seen the dairy giant write down more than $400 million on its Beingmate Chinese investment and the dairy payout stuck at about the same price as 14 years ago.
Monaghan has been on the co-operative’s board since 2008.
“He’s just another yes man and puppet to the board. He will not move Fonterra forward,” the Waikato Regional councillor said.
“[Monaghan] will not make Fonterra stronger, he will make it weaker.
“This is a big company, it makes for 25 per cent of our GDP… And they just haven’t prospered.
“It just needs a bloody cleanout.”
Rimmington, who unsuccessfully stood for the Fonterra board in 2010, said he was pleased Wilson was stepping down as in his view he didn’t have the right skills for the job.
He said Wilson’s leadership had been lacking when it came to tackling the serious challenges Fonterra faced, including the Sanlu contamination scandal in 2008, the disastrous Beingmate investment, and to change the Dairy Industry Restructuring Act which he claimed was costing the industry billions.
“It was meant to be transitional … John Wilson and his henchmen did nothing. We should have taken tractors to the road.”
Rimmington also criticised Fonterra for not resuming trade with Russia after it imposed sanctions on the European Union restricting dairy imports.
“We should have kept supplying our second biggest market,” Rimmington said.
He said Wilson was “not nearly tough enough” while negotiating the Trans-Pacific Partnership Agreement.
“Dairy was left out,” Rimmington said.
“[Wilson] is a delightful guy, but just didn’t have the skills.”
The first rule of being a director was to increase the value of the company for shareholders, Rimmington said, and Fonterra under Wilson’s leadership had failed to do that.
The second rule was to increase profitability, and Wilson had also failed on that score, he said.
Fonterra booked a more than $300m half-year loss after writing down its Beingmate investment by $405m.
It also had to pay out about $180m to infant formula maker Danone, linked to a precautionary recall in 2013 triggered after a contamination scare.
Rimmington said Fonterra’s leadership was tightly held.
“Once in the position they are very powerful … It is bloody hard to break into that cabal.”
But he expected there would be renewed interest in positions on the board due to Wilson’s decision to leave.
Attempts to reach Wilson and Monaghan for comment were unsuccessful.
Fonterra said earlier on Friday it would not be commenting on the leadership changes.
By: Rebecca Stevenson