Radical overhaul of Ornua board on the cards
A radical overhaul of the Ornua board is being considered by the organisation, the Farming Independent understands.
Major changes to the manner in which both co-ops and farmers are represented at board level is being considered by the dairy co-op, which markets more than 60pc of Irish dairy produce through its blue-chip Kerrygold brand.
Proposals put to the Ornua board last week are believed to include a major overhaul of its structure, which would result in the existing membership being largely replaced.
Currently, all the main dairy processors, with the exception of Kerry Group, are represented on the Ornua board.
This reflects the co-op ownership structure of the marketing body.
However, under the new proposals, five non-executive board members, five co-op representatives, and one representative each from the IFA and ICMSA would comprise a new board.
An Ornua spokesperson told the Farming Independent: "Ornua confirms there is an on-going governance review process in progress.
"All board directors are fully engaged in the process and have the interests of all key stakeholders at front of mind. The process will take some time to complete."
It is understood that the five co-op representatives cannot be on the board of their own co-op or be management executives. It is envisaged that these board members would be elected from a council of 40-50 co-op representatives.
The non-executive board members would be drawn from the wider business and agriculture sectors. It is also suggested that the shareholding in Ornua would be split between the co-ops and individual farmers at a ratio of 80pc to 20pc.
It is understood that the complete overhaul of Ornua’s board is an effort to address the current difficulties in the organisation which followed the launch by Glanbia of the ‘Truly Grass Fed’ brand in the US.
This was viewed by many in the industry as an attempt by Glanbia to ‘muscle in’ on Ornua’s lucrative market share in the US where Kerrygold is a leading brand and commands premium prices. Glanbia representatives are understood to voluntarily leave the room when the Ornua board discusses the US market.
However, the controversy has “stifled” the effectiveness of the board, industry sources told the Farming Independent.
Last month, Denis Cregan took over as Ornua chairman from Aaron Forde of Aurivo. Cregan is a former director of Kerry Group.
Ornua is the country’s largest exporter of dairy produce, which is sold under the flagship Kerrygold brand.
The business is owned by the country’s dairy co-ops and its sales last year totalled more than €2bn.
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