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Big Task for Global Co Councillors

Greetings Readers

Global Co now has a brand new Shareholders’ Council that has to get down to work immediately to appoint a Milk Commissioner and an independent valuer of the company. Forty-five shareholders have now been elected, by ballot, with a dead heat on the 46th position needing further sorting.

The questions for the future are the parts the council will play? Have the directors got a strong new arm to help them force their way into the future or have they been given a millstone to go around their neck?

Will this be a submissive group of farmers who rubber stamp everything, a helpful progressive team that wants to go forward, or a self important controlling body that wants to move into governance?

If it is anything but a strong arm with progressive views the whole Council exercise will be a very expensive, time consuming waste of energy that will be a thorn in the side of the directors.

The council duties fall into three main areas:

1 Working with the company on co-operative philosophy, mission statement, statement of intent of the Board and the assessment of the business units.

2 As an independent body of shareholders to appoint a Milk Commissioner and a company valuer.

3 Acting as communicating shareholders to report back to the rest of the suppliers on the company situation.

The directors, as shareholders, have traditionally done the duties in the first category but as the company demands grow the ability to stick to the co-operative principles and not sometimes drift into an easier option will be hard. Having a shareholder council in place will give some confidence to those down on the farm, and will offer a sense of being watched to those running the company. The main purpose of giving the council these duties is to make everyone feel comfortable.

The second responsibility, which involves the appointments, could have been through other channels but since this group is in place, it is the best body to choose the shareholder related representatives. It should also be responsible for the recommendation of directors’ remuneration to the shareholder annual meetings, but at this stage it does not appear to have this task.

While few of the new councillors will realise it, communication to the thousands of farmers, sharemilkers, managers, and farm staff will be the main assignment they have taken on. They may see themselves in a more important roll but basically they are the messengers to and from the top. It is no longer possible for every supplier of milk to have the close relationship with the directorate that once used to exist. The new council has to take on the human face of supplier/company information.

It is important, therefore, that those elected are articulate speakers and keen listeners. They must have a desire to circulate in the farming community and be prepared to share their knowledge of the company, carrying back the feelings of farmers to the Board. They must tread the fine line between giving out enough information to be honest and meaningful while remembering that they will have contact with sensitive information that cannot be publicised. It is worth noting that no shareholder can become a councillor without first signing a confidentiality clause.

The job of communication with suppliers has been done successfully before, in Kiwi, by employed Supplier Liaison Officers. The use of councillors to further this job will let the suppliers feel that they have more personal contact with the top. The comfort factor comes in again.

The whole exercise of setting up the council is designed to make shareholders feel represented, but it must not be forgotten that the real success of the company comes from the governance, and this is beyond the council’s domain. If the boundaries of co-operative principles have to be stretched to achieve certain aims, they probably still will be. If directors wander from the track that shareholders want there is still an election system that should give them their just deserts.

The new Shareholders’ Council is part of the package that is Global Co. It will be very costly to run, but will definitely offer reassurance to many. The company is currently heading forward with positive vibes from all connected with it, so this council must be encouraged to succeed. It must be a strong arm to assist the directorate and a forward thinking positive group to help carry the company onward.

Contributed by associate editor David Clegg.

Good Farming




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