Don't undersell experience on the CBH board

Don't undersell experience on the CBH board

OPINION
News
Former CBH board member Vern Dempster.

Former CBH board member Vern Dempster.

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The desire to improve governance at CBH by the board is commendable and overdue.

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THE desire to improve governance at CBH by the board is commendable and overdue.

However many of the suggested changes will not achieve that end and quite possibly will result in growers losing effective control of their co-operative in the process.

Of particular concern is the proposal to set a maximum of three terms for grower directors.

In my experience it takes at least a term to have a basic understanding of the business.

To have sufficient understanding to be able to effectively hold management to account and have the board determine the co-operative's direction, takes much longer.

A board full of inexperienced directors will mean the co-operative will be totally run by the management.

Weak and inexperienced boards are the downfall of co-operatives.

Increasing the proportion of independent professional directors will not improve grower outcomes.

While the independents may bring experience with them, they often don't understand the growers requirements and many are reticent to show leadership in holding management to account.

When your career depends on multiple board appointments, you may be reluctant to be involved in a controversy that doesn't directly impact you.

As an example, it is usually the diligent grower directors who are prepared to query in any depth the financial calculations that lead to justifying a bin closure.

Without an empathy for the additional costs imposed on growers, it all too easy for a director to passively accept a management proposal that may under-estimate its impact on affected growers and exaggerate the savings.

A far better approach to governance is to ensure you have better grower directors.

A board-appointed committee should seek out and assess potential grower directors and pass recommendations to growers for their election.

It's my view that all directors should be able to demonstrate that they have a base level of expertise in governance and finance prior to contesting an election.

This could be through prior board experience or through at least passing an Australian Institute of Company Directors (AICD)-type course prior to election.

Candidates, popular only through sporting pursuits or politics, are not necessarily good directors.

The selection committee also needs to vigorously assess the performance of sitting board members and pass recommendations to growers on their reappointment.

Ongoing board peer reviews would be very useful in this assessment.

It is virtually impossible for growers not on the board, to know who is performing well and who is being a passenger.

Unfortunately the CBH governance review is unclear as to where to go on the actual election process, but it clearly needs reform.

A public bun fight between board candidates does the co-operative immense harm.

Depoliticising the director election process could be achieved by limiting electioneering and by CBH conducting orderly "meet the candidates town hall meetings" throughout the zones, where candidates are given equal opportunity to present their views and credentials.

The automotive co-operative Capricorn restricts director electioneering to an A4 paper delivered with the voting papers, but the co-operative's nominations committee ranks the candidates on key attributes and advises members.

The proposed skills matrix should be treated with great caution.

At the AICD updates in November last year, the presenter, well known director Graham Bradley, cautioned against this approach, saying that for 90 per cent of the time, the decisions made by the board will be outside that director's area of expertise.

In my opinion it is more important that a director is well rounded and broadly experienced.

If specific skills are required by the board, it is far better to acquire them by appointing independent experts to board committees that investigate specific issues and pass recommendations back to the main board.

This way the board is not held hostage to outside directors who may be ignorant of issues outside of their area of expertise and unappreciative of the needs and requirements of grower members.

With regard to diversity, the notion that grower director all think the same and have the same skills is profoundly ignorant.

Diversity in opinions, views and skills among growers is extremely strong.

Compromising the objective of appointing the best director for the job by imposing considerations of ethnic background, sexual preference, age, gender etc will just result in a weaker board.

In endeavouring to improve CBH's governance, growers need to be on guard that the changes actually deliver a stronger board.

Please be aware that there are those who have a vastly different vision for the future structure of CBH to the current co-operative one, who will find it expedient to promote changes that weaken grower control under the guise of improved governance.

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