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Group may register industry structure protest via MLA director vote-down

Jon Condon, 15/11/2012

 

A group of concerned large-scale beef producers may target this afternoon’s MLA annual general meeting to register a broader protest over perceived industry structure issues, by attempting to vote down one or more of the proposed MLA directors up for election.

The network, said to involve about a dozen large corporate and individual levy payers met in Brisbane for a strategy meeting last week to consider its options. The group is known to have been soliciting support from a wider cross-section of large MLA levy payers over the past fortnight.

Despite the lack of any direct connection with MLA functions, it appears the motive for such a move is an attempt to draw attention to broader industry structural problems, focussed on Cattle Council of Australia and the role of the Red Meat Advisory Council’s role.

Key architects behind the move have chosen not to disclose their plans to Beef Central in recent days.

One of the members of the levy payer group, who asked not to be identified, said the group discussed various options at the MLA AGM.

While it is still unclear which course will be followed this afternoon, the core group had reached a consensus that ‘things had to change’, he said.

He confirmed that a more ‘representative and inclusive’ CCA, which had more of a strategic management approach over MLA, was a fundamental requirement.

“There’s a common belief that we can’t continue to allow MLA to spend money all over the shop: we need to take closer control over the industry priorities,” he said.

While the option to vote against the MLA AGM motions to endorse new or returning board members was explored last week, some of the participants, at least, representing a ‘significant block of votes’, had come away from the meeting ‘considering their position.’

“Some were beginning to question what would be achieved by the move, and what are the priorities are. It’s alright to throw rocks and burn the house down, but what’s it going to achieve?” the group member said.

He was unable to predict whether a challenge would ultimately be mounted at this afternoon’s AGM to vote against the endorsement of MLA boardmembers.   

“But voting statistics from past AGM’s would suggest that the corporates have largely sat back from the voting process, and not always exercised their voting power, as a group or individuals. If some of them were to exercise that vote at the AGM, it could put some pressure on the outcome,” he said.

“But I don’t believe what came out of last week’s meeting was a block of institutional investors who are intent on bowling over the MLA election motions. They key is that there has to be a response, or a solution – there is no point in simply registering a no vote, because nothing will come of it.”

Last week’s meeting also discussed notifying Ag minister Joe Ludwig that such a vote was ‘on the cards,’ as a signal to government over the grassroots member support for a comprehensive review of industry structures.

“But it’s the old story: until you know what you want, don’t go asking for help,” Beef Central’s contact said. “We need to either pull together as an industry in arriving at a solution, or walk away from the reform agenda.”          

One of the nation’s largest cattle levy payers, the Australian Agricultural Co, told Beef Central yesterday it would not be supporting any action to vote down the nominated MLA directors. The company confirmed it had a representative present at the Brisbane meeting.

Chief executive David Farley said the proposal had been lobbied to him this week by ‘many, many people’ – not surprising, given the company’s large voting entitlement – but he did not support it, in principle.

“The problem is not with MLA,” he said. “The problem is how Cattle Council of Australia is structured, and how grassroots producers are represented.”

“To use some form of protest vote at the AGM is not the right forum to get those messages across to government and industry,” he said.

“The question I asked the people that called me was, where is your alternative? Give me the solution, and nobody has a workable alternative,” Mr Farley said.

He said it would be unfair and inappropriate to run an agenda through the MLA board member selection process as some form of broader expression of industry concern about structural matters.

“It would be irresponsible, considering it is an industry asset that is functioning – yes, it can function better, but why put it in a dysfunctional state to deliver a message? The real message we the industry need to focus on is getting CCA structured properly.”

AA Co would only be voting in favour of sensible, well-structured change, and had not yet seen evidence of that.

“Why damage the industry asset, in this case MLA, when the problem is not with the asset itself, but the governance of that asset, which is CCA?”

“The change must come at CCA level, which is the ultimate governor of MLA, before we mess with the main asset of the industry, which is MLA.”

Mr Farley said whatever restructure model preference was decided on at CCA’s annual meeting yesterday would not be effected for another year.

The absence of support from large entities like AA Co and Georgina Pastoral Co places into doubt the lobby group’s ability to achieve its objective, given that it needs 50pc of the registered (and active participant) MLA vote to reject the board selection committee’s nominations.

Different reports have suggested the group will target just one of the proposed directors; the two nominees seeking election for the first time (John McKillop and Ms Gilbertson); or all four (including re-standing directors, Peter Trefort and Greg Harper).

Should the group be successful in its aim, the boardmember selection process would start from scratch for each rejected candidate, with nominations called for, first and second round interviews conducted, and a final selection made. Alternatively, the existing board could carry on minus one or more directors, as casual vacancies.

  • MLA’s annual general meeting starts at 3pm, WA time this afternoon. More details on Beef Central as they unfold. 

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