Kerry Group Plc halves farmer presence on its board
Published 13/09/2016 | 02:30
Farmer representation on the board of Kerry Group Plc will be halved next year under new proposals from the company.
There are currently four Kerry Co-op nominees on the 15-member Kerry Group Plc board. However, this number will be reduced to two next year.
Kerry Group informed the board of Kerry Co-op regarding the proposed changes over the last fortnight.
When contacted by the Farming Independent on this issue, Kerry Group Plc confirmed that farmer representation was being reduced.
"Recognising the dairy heritage of the group, the chairman of Kerry Group has informed the Kerry Co-op board that a new process for selecting two appropriate appointees will commence in mid-2017," Kerry Group stated.
The manner in which farmers are selected for membership of the company's board is also being totally revamped.
In the past the four candidates were elected from among the 28-member Kerry Co-op board. However, from next year, the co-op board must put a minimum of eight nominations forward for the two company board positions, with two successful candidates being chosen after an interview process.
It is understood that the matter has been discussed by the Kerry Co-op board, and clarity has been sought regarding the proposals.
A spokesman for Kerry Group Plc said that the nomination committee - a sub-committee of the company's board - had sole responsibility for board appointments.
"The board of Kerry Group Plc, upon the recommendations of its nomination committee, is solely responsible for appointments to the board of Kerry Group Plc. All such appointments are subject to shareholder approval," Kerry Group stated.
Farmer representation on the Kerry Group Plc board was cut from seven to four in 2011 as part of the process which saw the co-op's shareholding in the company drop below 20pc. The co-op currently holds a 13.7pc shareholding in the Kerry Group Plc.
Meanwhile, the arbitration process is continuing involving Kerry Group Plc and Kerry Co-op regarding a commitment given by the company's chief executive Stan McCarthy in 2011 to pay the country's leading milk price (on a like-for-like basis).
Kerry Group argue that the commitment on the leading milk price did not include the West Cork co-ops, a contention that is being challenged by the co-op. Kerry's failure to raise its milk price for July supplies has added fuel to farmer anger with the processor.
Co-op shareholders concerns have also been heightened by a question mark hanging over the provision of secretarial services to manage the co-op's €1.77bn stake in the multi-national food ingrediants giant. There are suggestions that the co-op should assume the cost of this function when current secretary retires next year.