Wool patriarch’s extended reign

Australian Wool Innovation’s lengthy board terms under scrutiny


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AWI chairman Wal Merriman will be commander of the industry for 11 years before his position is officially up for voting.

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AWI chairman Wal Merriman.

AWI chairman Wal Merriman.

Australian Wool Innovation chairman Wal Merriman will have been commander of the industry organisation for 11 years when his position is up for election in 2019.

AWI, which received more than $60 million in woolgrower levy funds last financial year and $14.7m in federal government funding, has come under fire for Mr Merriman’s behaviour in recent weeks, which has been deemed “unethical” by some woolgrower shareholders.

The conduct controversy comes ahead of the AWI leadership team’s appearance at a Senate Estimates Committee meeting in Canberra on Tuesday, where questions are expected to be raised as to whether the gig is up for the wool industry’s patriarch.

Further punches are expected to be thrown at AWI’s annual general meeting to be held on November 17, which is anticipated to set the tone for woolgrower activism.

Disgruntled shareholders are hoping for a change but are restrained by the constitution, which has empowered AWI’s seven directors to be some of the longest standing among Australia’s agricultural industry group boards. 

In 2009, one year after Mr Merriman was elected as chairman by the board, AWI directors amended the company’s constitution to enable elections to be held every two years – immediately doubling directors’ term from three years to more than six despite industry opposition to the move.

The slight alteration to the constitution had a dramatic effect.

Previously, directors were required to retire from office, with the option to re-stand, at its third annual general meeting but the inclusion of “third rotation year” effectively doubled board members’ terms.

The decision was made despite sweeping changes proposed to AWI by Arche Consulting, as part of a mandatory independent review of performance, in the same year, which recommended the introduction of a skill-based board.

The 2009 review was damning of AWI in areas of strategic planning, governance, consultation and the measurement of performance.

Nonetheless, AWI’s pitch was to save money and reduce the politics of director elections; however WoolProducers Australia (WPA) came out swinging in objection.

“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,” former WPA president Don Hamblin said at the time.

“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 three-year terms.”

Next month Mr Merriman marks nine years as AWI chairman, longer than his predecessors Brian van Rooyen, Ian McLachlan and Maree McCaskill combined.

Mr Merriman has been paid more than $1.3m in committee fees in his nine years as chairman, including $175,489 for the past financial year alone, according to documents obtained by Fairfax Media.

Since elected in 2008, current board director Meredith Sheil has only stood for re-election once, while this year marks the first vote on Colette Garnsey’s directorship since elected in 2011.

Mr Merriman had one term retirement under the changes, and current board director David Webster has had two since elected in 2008.​ 

It is a far cry from Meat and Livestock Australia and Grains Research and Development Corporation (GRDC), which both hold three-year director terms, with GRDC including a maximum of two terms.​

AWI media manager Marius Cuming did not comment on the reasoning behind doubling board directors’ terms, or whether this had led to any industry benefit. He said further information could be found at wool.com 

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