I’ve been clear all along I expect AWI to get cracking on implementing recommendations from the EY review as soon as possible.
The Federal Government has warned of enforcing a deadline for the nation's wool body to overhaul its governance, as Australian Wool Innovation (AWI) chairman Wal Merriman pleads to industry to delay constitutional changes.
Federal Agriculture Minister David Littleproud has urged AWI to “show some leadership” and immediately adopt all 82 recommendations handed down in its performance and governance review last month, which was conducted by Ernst & Young (EY).
Mr Littleproud’s warning comes as Mr Merriman issued a letter to industry stakeholders last week, which was obtained by Fairfax Media, calling on support to delay a vote on whether directors should be limited to a 10-year tenure.
AWI said it had already accepted and actioned 60 recommendations but was seeking legal advice on nine others.
In response to questions from Fairfax Media, AWI did not detail nine recommendations but said they were all related to constitutional changes.
These refer to EY’s recommendations to “remain relevant” and “support good corporate governance” by transitioning to a skills-based board and cap those positions at 10 years.
This would prevent Mr Merriman and fellow directors David Webster and Meredith Sheil from seeking re-election next year.
In a letter to the Industry Consultative Committee, Mr Merriman said to avoid clashing with WoolPoll on November 2, AWI planned to address these nine recommendations “early next year”, rather than at the Annual General Meeting (AGM) on November 23, this year.
“We have some concerns that have been expressed to us, as well as the Department of Agriculture and Water Resources, around the confusion that will be caused with the AGM and WoolPoll simultaneously being debated,” Mr Merriman said in the letter.
“The board are keen to get clear air for WoolPoll and then present the constitutional issues/recommendations to shareholders at an EGM (Extraordinary General Meeting) in the new year, which will allow the matter to be dealt with and provide clarity in ample time for the director election in November 2019.”
But Mr Littleproud said he did not ask Mr Merriman to send the letter, rather suggested he take feedback from his stakeholders, as it would be silly to act without their support
“I’ve been clear all along I expect AWI to get cracking on implementing recommendations from the EY review as soon as possible,” Mr Littleproud said.
“The AWI board should signal intent to comply with all recommendations and take that to shareholders.”
He said EY stated only four of 82 recommendations required shareholder approval.
He said he would prefer AWI showed leadership on this issue rather than forcing him to legislate.
Industry groups believe all 82 recommendations should have been implemented already, given they were released over a month ago, and say further delay to the process was damaging to the wool industry.
Australian Wool Growers Association chairman, Robert McBride, said undermining the government’s wishes could have catastrophic effects on the wool industry, by jeopardising more than $13 million in matched levy funding.
“We’ve been asking for these changes for a number of years and it’s fallen on deaf ears, and I think it really shows the temperament of Wal Merriman to think he’s not only above woolgrower bodies, but now the government,” Mr McBride said.
“We are well-supported by the government, and we don’t want AWI to alienate that relationship.”
He said he is “sick and tired” of having these changes put off, and said immediate accountability needs to be shown.
Even if this means Mr Merriman needs to step down, he said.
“We want to see a united woolgrowing industry moving forward, run by professionals who are accountable and provide transparent information,” he said.
“If Wal is not prepared to change with the times, then it is maybe time for him to step down and let the next generation stand up and move forward.”
WoolProducers Australia (WPA) wrote to AWI seeking more information about what specific recommendations it planned to put to shareholders, but was unsatisfied by the industry body’s response, according to chief executive Jo Hall.
“Unfortunately AWI has chosen not to disclose some pretty vital information to make a considered response to its request,” Ms Hall said.
“We’ve had long held concerns about the transparency of the organisation, and this is a key example of our concern.”
She said they were trying to understand why there needed to be an EGM, but without that information, believed shareholders would have the capacity to be able to consider WoolPoll and any constitutional changes at the same time.
AWI was seeking feedback, “one way or the other”, before any decision was finalised.
The deadline for this feedback was Wednesday, August 29.
Ms Hall said WPA had also requested an extension, given the letter was only received last week, but that was denied.
“We weren’t granted an extension, but we have responded in light of the fact that we believe there is no compelling evidence to hold an EGM, which we thought there might be, given we weren’t provided with that information,” she said.
“We told AWI that we can’t see any need for an EGM.”