THE Cole inquiry's damaging revelations have placed AWB's unusual share arrangement under scrutiny, with a corporate governance expert saying the system was a disaster waiting to happen.
Corporate Governance International (CGI) director Sandy Easterbrook attacked AWB's A- and B-class share system - set up to protect grower interests - which is held dear by much of the farming community.
Mr Easterbrook said the system, which meant B-class or non-grower shareholders elected only two of the 11 non-executive directors in spite of their economic ownership of the company, was fatally flawed.
"The potential for destruction of shareholder interest is inherent," he said.
"No other ASX200 company has such a flawed governance structure written into its constitution.
"That the bad governance seeds should have spawned such a disastrous crop should not surprise."
Mr Easterbrook's comments reflect a growing groundswell among the broader business community that AWB must be brought into line with the corporate governance practices of the majority of ASX-listed companies.
Other aspects of the company's operation to come under fire include its wheat export monopoly, which opponents claim removes a key market sanction, and the 10pc shareholder limit, which critics say insulates the organisation from takeover bids that keep other ASX-listed companies in check.
Mr Easterbrook questioned the skill set of the grower-directors, saying the election of B-class director Peter Polson to the interim chief executive officer position reflected a lack of depth in the grower-directors.
"It underscores another serious question of this board: whether at this crucial time it has the skills and experience to monitor the strategy and performance of management effectively," he said.
He also was unhappy that Mr Polson's transfer to the executive robbed the B-class shareholders of another director of theirs, meaning they were represented by just one independent - non-grower or non-grower elected - director.
A motion by AWB to increase the number of non-grower elected directors on the AWB International (AWBI) board last year was voted down at the AGM, largely on the back of resistance from influential Western Australian farmer groups concerned about the erosion of grower rights.
Mr Easterbrook's comments are unlikely to win many friends among a farming sector already concerned that AWB is being dragged ever further from its grower roots.
Growers are already questioning whether AWB is becoming too shareholder-focused at the expense of the organisation's charter to maximise grower returns through the national pool, and for the most part they will be unlikely to support changes that further remove the company from their hands.
If Mr Easterbrook's comments gain further momentum within the business world, the effects will not just hit AWB.
Other grower-operated organisations such as GrainCorp and ABB Grain also have A- and B-class share systems.
However, a former AWB director spoke out firmly in favour of the share system.
Ian Cush, Moree, NSW, a grower-elected director on the AWB board from 2000 to 2003, said the current system supported farmers who provided the company with its income.
"I think it is in the best interest of growers," he said.
Mr Cush said he did not see a credibility issue with the large number of grower-directors, who he said had different areas of expertise to the other directors.
"In the board room the B-class directors may have been more business astute, but the A-class directors were in there with a rural perspective, looking after their constituents, the growers," Mr Cush said.
He said he hoped checks were put in place to ensure there was not another oil-for-food type scandal, but said changing the set-up of the boardroom was not the way to go about it.
"Put it this way, the B-class directors didn't catch on either (to the alleged illegal payments)," Mr Cush said.