The chair of New Zealand dairy co-op Fonterra, John Monaghan, has confirmed he will retire as director this November, at the end of his current three-year term.
In a note to the co-op’s farmer-owners and unitholders, Mr Monaghan explained that his decision was the next step in the Fonterra board’s development and succession planning.
“After 11 years as a director, and having seen through the introduction of our new strategy, operating model, and with our debt reduction efforts well progressed, the timing is right for me and for the co-op,” he said.
He added that the board is committed to a planned chair succession process, to give chief executive Miles and his senior management team “the governance stability and confidence they need to maintain the co-op’s momentum”.
Fonterra, which had a difficult year in 2019, posting a net los of NZ$605m (£310m) and shedding poorly performing operations around the world, said its planned to announce a new chair elect by August.
This, it added, will give its farmer-owners transparency of leadership prior to the board elections and allow for a period of handover before Mr Monaghan retires from the board.
Under Fonterra’s constitution, its chair must be selected from its pool of seven elected farmer directors on the board. Its independent directors are not eligible for consideration as chair.
The co-operative also provided an update on a replacement for former independent director Simon Israel, who retired from its board last November.
It says it was making good progress on securing a replacement for Mr Israel and will update its farmer-owners and unit holders once a suitable candidate has been confirmed.
Meanwhile, Fonterra – New Zealand’s largest business, accounting for a quarter of the country’s exports, with 10,000 farmer owners and revenues of more than NZ$17bn (£8.3bn) – revised its milk collection forecast for the year.
Director of co-operative affairs Mike Cronin told the New Zealand Herald that February’s figures showed milk collection is down slightly on last year, reflecting recent flooding events and drought conditions.
He added that the co-op has been sending supplies of water to farmers in the drought-affected Northland region.