PEAK GROWER organisation WoolProducers Australia (WPA) is advising shareholders of the wool industry research, development and marketing company, Australian Wool Innovation (AWI), to vote against the proposal by directors to double their term in office.
WPA has also noted that, unlike what has happened in previous years, the new AWI board has refused to reveal the salary that it is paying itself in the 2009 annual report.
“The AWI board cannot seriously expect growers to double the length of their contract, while not even knowing how much we are paying them,” WPA president Don Hamblin says.
"No other business operates in their fashion.
“AWI directors are proposing to growers that the AWI constitution be amended to hold directors elections every two years. This will mean a doubling of their term as director from three years to a possible six.
“Six years is way too long for a director to be in charge with no recourse from shareholders, and is completely inconsistent with modern governance trends.
“AWI is the recipient of tens of millions of dollars in woolgrower and taxpayer funds. They should be striving to meet accepted benchmarks for governance of companies, which means 3 year terms.”
“WPA rejects the argument of AWI directors that this is about saving money and reducing the politics of director’s elections.
"Transparency and accountability to shareholders is not the place to cut corners and if AWI want to reduce politics, then they should agree to an overall reform of the process for electing directors.”
As part of the current 2009 WoolPoll, where woolgrowers are being asked to vote on their preferred rate of levy for the next three years, the AWI board were required to appoint a consultant to conduct a Review of Performance (ROP) on the company. ARCHE Consulting subsequently recommended sweeping changes in AWI, including the introduction of a skill based board.
“The AWI board effectively ignored the recommendations in the ARCHE consulting report, which concluded that growers are not getting value for money from AWI, and have instead come up with a proposal that primarily benefits the sitting directors,” he says.
“More and more independent voices are saying that AWI needs structural reform, yet the only change that the board has agreed to is to double one of their entitlements.”
“It is very unusual timing to be asking for 100pc increase in their term, considering that the board is struggling to enthuse woolgrowers to vote in 2009 WoolPoll and on the back of a negative review of the company.”
AWI comments:
An AWI spokesman later today has pointed out that at the AWI AGM this month, shareholders have the opportunity to vote for a change to the AWI Constitution.
The proposal is to change the frequency of the election of board directors by rotation from an annual process to once every two years.
AWI says such a change would reduce the annual distraction of these elections and ensure a longer term and consistent focus on the business of wool.
The AWI chairman, Wal Merriman, has stated emphatically he will not remove the democratic right of woolgrowers to nominate and elect their own leaders, a right not afforded to growers under the proposed WoolProducers model.
Payments to AWI directors are included in the 2009 Annual Report (p58), in aggregate, as a Note to the Financial Statements in line with the Accounting Standards.
Last year, more detailed information was presented differently, in the Directors’ Report. AWI Board fees have not increased since 2006/07.
PriceWaterhouseCoopers has audited all financial information contained in the 2009 Annual Report, AWI points out.
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