The federal government is considering its options after receiving Australian Wool Innovation’s (AWI) resubmitted Review of Performance (ROP) implementation plan.
AWI were asked for more detailed information on the implementation plan for all 82 recommendations made by the Federal Minister for Agriculture, David Littleproud, after he labeled their first attempt “short in detail” and “vague”.
A spokesperson from the Minister for Agriculture’s office told Fairfax Agriculture Media that the government is considering the updated information from AWI and it’s options going forward hinting that there may be serious ramifications for AWI if they do not adhere to the recommendations made by independent accountancy firm Ernst & Young.
In its resubmission the peak wool industry body has refused to backdown on the five controversial recommendations they say are for shareholder consideration in their implementation plan, saying they will have significant ramifications to shareholders.
At the Senate estimates hearing last week, AWI secretary Jim Story reneged on the proxy position saying that the proxy voting system didn’t need to be placed in front of shareholders for voting.
But AWI CEO Stuart McCullough said there are wider issues about the proxy voting system generally and it should go before shareholders.
“In particular the recommendation for undirected proxies given to directors being automatically voted in accordance with the decision of the Board Nomination Committee (BNC), even though the composition of that Committee may be quite different from the board itself,” Mr McCullough said.
"These are major changes with significant ramifications for shareholders and are matters that need to be bought to their attention.
Mr McCullough has stressed AWI supports the implementation of all 82 recommendations in the ROP and highlighted that the implementation plan specifies how the organisation will address them.
“Our implementation plan provides a comprehensive three-year roadmap to successfully complete this process,” he said.
“In implementing each of the 82 recommendations, our actions in the plan fall into three categories.”
Category one is the 75 recommendations that relate to operational matters, the implementation of which are already under way with some already complete.
The second category, of which there are two items, are those which are agreed in principle.
Mr McCullough said AWI are working to identify a best approach to implementation.
“The third category includes five recommendations that the Board believes would result in significant change to the ‘DNA’ of AWI, and as such are highlighted for special consideration by AWI shareholders,” Mr McCullough said.
“As all changes to AWI’s Constitution require support from its shareholders, AWI will put those recommendations requiring shareholder deliberations to an Extraordinary General Meeting (EGM) to be held in March 2019.
“In preparing our implementation plan, we have listened to woolgrowers and thought hard about what we do. Our plan provides a clear roadmap for continual improvement to the organisation and demonstrates our commitment to maintaining our industry leadership position and acting in the best interests of Australian woolgrowers.”
Mr McCullough said the transparency and information flow with woolgrowers and industry has been of critical importance to AWI throughout this ROP cycle as they embrace all the recommendations.
Sign up for our newsletter to stay up to date.