A motion that would impose a 10-year limit on the length of director terms on the Australian Wool Innovation Board will be put to shareholders at the Annual General Meeting in November.
It will require the support of 75 per cent of shareholders to be successful.
The proposed roll out of the 10-year limit on the length of director terms has prompted two directors to signal their intention to retire from the board at the 2021 AGM, including the current chair, Colette Garnsey.
AWI Chief Executive Officer Stuart McCullough said the length of director terms was an outstanding issue from the EY Review of Performance of AWI in 2018 and it needed to be resolved.
"During that time we worked very hard with the wool industry consultancy panel after being directed by the government to do so," he said.
The review recommended that AWI implement maximum periods of 10 years of Board membership including the Board Chair.
It also recommend a minimum roll off period of two years (period of time Directors must remain off the Board before standing for re-election).
The chairman's proxy votes will be directed to supporting that motion. If the motion is successful it will take effect after the AGM.
Mr McCullough said given AWI have another performance review coming up, the board felt it was time for them to step in and do something.
"They felt the only thing they could do was put it to the shareholders. The shareholders are the ultimate owners of the company," he said.
Ms Garnsey, who has served as a director since 2011 and as chair since 2018, said under the ongoing board renewal process, this year's AGM would be the right time for her to stand down as a director and as the chair.
"I relish my role as an AWI Director and will continue to work hard for Australian woolgrowers as long as I remain on the Board," Ms Garnsey said.
Director David Webster, who has served as a Director since 2008 and was re-elected by woolgrowers at the 2019 AGM, has confirmed he will not be standing for re-election at the 2023 AGM, when his current term expires.
Mr McCullough said the proposed tenure will affect all Directors moving forward.
"The dilemma with Colette is she has to rotate this year, so there is a good probability that 75pc support will be received to impose this motion," Mr McCullough said.
"But if it doesn't get up, after the shareholders have had their say, the rotation of the board after 10 years doesn't apply."
He said history will shine brightly on Ms Garnsey time on the Board and her three years as Chairman.