McLaclan wants hands-off policy

26 Nov, 2003 10:00 PM

THE Federal Government should resist any recommendations from the Senate probe into Australian Wool Innovation to place more controls on the corporation, according to chairman Ian McLachlan.

Mr McLachlan told last week's AWI annual general meeting in Perth the inquiry had focused on events that took place before most of the current board was elected last October and substantial changes and improvements to the company's corporate governance had been made since then.

He said it would be a pity if the inquiry recommended more government control of AWI.

"We think that avenue should be strongly resisted," Mr McLachlan said.

He said the shareholders had identified the problems that had existed and acted by appointing the new board.

"And this patently tells us that shareholders answered the question as to whether or not changes should be made 12 months or so before the government did," he said.

"There is no possibility that government involvement in our view would streamline, hasten or improve the processes within the structure of AWI."

Mr McLachlan said nearly all the problems of corporate governance had been systematically addressed and some recently discovered issues were under investigation.

"AWI now has better accounting systems, more appropriate levels of financial authority and more stringent project approval procedures," he said.

The AWI constitution has been amended to provide for more transparency and accountability, including changing the number of signatures needed to nominate for a position on the board from 1800 to 100.

Mr McLachlan said all AWI shareholders should be pleased with the progress the company had made this year.

"We are now able to devote much more, in fact, all of our management time, effort and resources with getting on with what our business is all about," he said.

"That is planning research and carrying out the development and chasing innovation for the shareholders of AWI and for the Australian wool industry in general."

Three directors, Christopher Abell, Kevin Bell and Peter Sykes, were up for re-election at the AGM and were all returned unopposed.

"The fact that today's election of directors is not being contested is pretty clear proof that the ship has become more stable than it was some time before," Mr McLachlan said.

He said the 2pc woolpoll support was also a vote of confidence in the board, particularly with a lot of woolgrowers in the eastern states still coming out of the drought.

"The result shows a maturity and confidence in research and development in this industry which is so vital in this era of major competition," Mr McLachlan said.

But he said the 2pc funding rate was being undermined by the rapid rise in the Australian dollar and even though AWI had budgeted $85 million for 2003-04, only $40m had so far been committed.

"We are monitoring our position month by month with nothing less than an eagle eye I can assure you," Mr McLachlan said.

He said despite the rocky year on the political front, AWI had still managed to deliver some fascinating research results.

These included the corporation's role in developing two new legume pastures, a machine washable woolen suit, a pain free mulesing alternative, a non-woven wool processing method and a national approach to on-farm research adoption.

Mr McLachlan said AWI was about to employ a new general manager responsible for trade development with a particular emphasis on China.

"This general manager will be helping us to get our innovations to the market so we continue to invest in market development, new product development and drive the delivery of these things as hard as we possibly can," he said.

"We view the linking of these developments to the decision makers in trade as the very soul of our work."



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