Appointing Fonterra’s CEO Tuesday, Jun 24, 2003
Fonterra is this week expected to announce who will take the role of its Chief Executive officer for the next period.
Very little has leaked from the company about who is in the running for this important job.
It would seem that the cooperative is up against the shareholders unwillingness to pay the market rate for highly qualified and very motivated internationally experienced managers making it appear likely that Mr Norgate will be reappointed with an employment package not too different from his existing contract.
Whether this is in the interests of Fonterra’s expected success as a major international dairy product producer and trader has not been openly debated. Already the grand plans for growth and expansion promoted during the merger period appear to have been abandoned with little comment or justification.
Rumour suggests that the directors of Fonterra are likely to appoint a lower cost local rather than punt on a much higher priced international manager. This may satisfy the shareholder critics who see any salary greater $2 million as excessive but does little to ensure that the cooperative will perform to their expectations in payout.
It is distressing to see that the potentials of Fonterra are gradually being diminished by caution and timidness in the area of management experience and expertise.
In times past it was suggested that the directors of the small dairy cooperatives were reluctant to employ managers that they did not feel slightly superior to. It's to be hoped that such tactics do not apply with the current employment task.
Appointing any manager short of the best available will play into the hands of the critics of the cooperative structure.
The Fonterra directors need to show courage and leadership in making their appointment.