Report of WPC80 Independent Inquiry for Fonterra Board
In August, the Board of Fonterra commissioned an independent inquiry into the WPC80 precautionary recall.
The Inquiry Committee was given a far-reaching remit to review the circumstances surrounding the recall and the subsequent chain of events, and to look more broadly at Fonterra’s business procedures and systems.
The Committee was comprised of:
Sir Ralph Norris (chair) - Independent Director (FNZIM, FNZCS)
Sir Ralph Norris joined the Fonterra Board in 2012 as an Appointed Director and he sits on the Appointments, Remuneration and Development Committee and the Audit, Finance and Risk Committee. Sir Ralph also serves on the Board of the Fonterra Shareholders’ Fund, Origin Energy Limited and the New Zealand Treasury, and on the Council of The University of Auckland. In addition, Sir Ralph serves on a number of Advisory Boards in both Australia and New Zealand. Sir Ralph had a 40-year career in banking and was Chief Executive of the Commonwealth Bank of Australia until December 2011. Prior to that, he served as Chief Executive of Air New Zealand Limited and Chief Executive of ASB Bank Limited. Sir Ralph was made a Knight Companion of the New Zealand Order of Merit in 2009 and a Distinguished Companion of the New Zealand Order of Merit for services to business in 2006.
Dame Judith Potter - External Independent Member (Diploma of Business Studies)
Dame Judith Potter is a former President of the Auckland District Law Society and was the first women president of the New Zealand Law Society. In 1997 she was appointed as a judge of the High Court of New Zealand and presided over several high-profile cases in her 15 years on the bench. Her previous roles include director of the Electricity Corporation, a director of the New Zealand Guardian Trust Company, chairwoman of the Broadcasting Standards Authority and a member of the Securities Commission. On 31 December 2012 Judith retired from the bench in New Zealand and accepted an appointment to the High Court of the Cook Islands. In the New Years Honours 1994 she was appointed a Commander of The Order of the British Empire for her services to the legal profession.
Professor Stuart McCutcheon - Vice Chancellor of the University of Auckland (B.Arg.Sc (Hons), Ph.D)
Professor McCutcheon holds a B.Agr.Sc(Hons) and Ph.D, both in Animal Science from Massey University, followed by a postdoctoral fellowship at Cornell University on a Harkness Fellowship. His research interests included how biological processes such as fetal and neonatal growth and lactation are regulated. He was subsequently Assistant Vice-Chancellor (Research) and Deputy Vice-Chancellor at Massey University.
Professor McCutcheon was Vice-Chancellor of Victoria University of Wellington from 2000 and has been Vice-Chancellor of the University of Auckland from 2005. He chairs Auckland UniServices Limited, is a past Chair of Universities New Zealand, and has been a board member of the New Zealand Dairy Research Institute and the Malaghan Institute of Medical Research.
Simon Israel - Independent Director (Diploma of Business Studies)
Simon Israel was appointed to the Fonterra Co-operative Group Board in 2013. Simon is currently the Chairman of Singapore Telecommunications Limited and is a Director of CapitaLand, one of Asia’s largest real estate companies. He was an Executive Director of Temasek Holdings for six years and President from 2010 to 2011. Prior to that he was Chairman for Asia Pacific of the Danone Group. He was also a director of Fraser & Neave, Neptune Orient Lines, Asia Pacific Breweries, Griffin Foods and Frucor Beverage Group. Simon has ten years’ experience in the dairy industry with Danone as a Senior Vice President and member of the Group Executive Committee and as Chairman for the Asia Pacific region. He was conferred Knight in the Legion of Honour by the French Government in 2007 and awarded the Public Service Medal in Singapore in 2011.
John Waller - Independent Director (BCom, FCA)
John Waller joined the Fonterra Board in February 2009 as an Appointed Director. John is Chairman of the Milk Price Panel and is also a member of the Audit, Finance and Risk Committee. He is Chairman of the Bank of New Zealand and the Eden Park Trust. He is a director of National Australia Bank Limited, BNZ Investments Limited, Haydn & Rollett Limited, National Equities Limited, Alliance Group Limited,Sky Network Television Limited, Property for Industry Limited and Donaghys Limited. John was a partner at PricewaterhouseCoopers for over 20 years. He was also a member of their board and led their advisory practice for many years.
Blue Read - Farmer Elected Director
Blue Read was elected to the Board in 2012. He sits on the Co-operative Relations Committee and the Governance & Representation Committee. He was previously the Chairman of the Fonterra Shareholders’ Council from 2007 to 2010, having been a Shareholders’ Councillor since 2001 and Deputy Chairman from 2003 - 2007. Blue has previously been Chairman of Cooperative Business New Zealand, Taranaki Dairy Section of Federated Farmers and Chairman of the New Zealand Sharemilkers Association. Blue lives and farms near Urenui in Northern Taranaki.
Nicola Shadbolt - Farmer Elected Director (BSc(Hons), MAgrSc(Hons), FNZIPIM(Reg))
Nicola Shadbolt was elected to the Fonterra Board in 2009. She serves on the Co-operative Relations Committee and Fonterra’s International Farming Board Committee. Nicola is a Professor at Massey University, Director of the Centre of Excellence in Farm Business Management, a director of the International Food and Agribusiness Management Association, trustee of the Agri-Women’s Development Trust and represents New Zealand in the International Farm Comparison Network in Dairying. Nicola is a shareholder and a director of five farming and forestry equity partnerships that include two dairy farms in the Manawatu.
The inquiry team was composed of:
Jack Hodder QC
Jack Hodder is a partner in the litigation & dispute resolution team and Chairman of the Board at Chapman Tripp. He is also a Queen's Counsel, focusing on advocacy and advice in all aspects of commercial and public law. He appears regularly as leading counsel in arbitrations and in litigation in the High Court, Court of Appeal and Supreme Court. He has extensive experience on a wide range of disputes involving major commercial contracts, competition law, judicial review, trade practices, company law, IP, major rental reviews and defamation. Recent highlights include successfully representing the plaintiff in the judicial review of the Auckland District Health Board’s award of a long-term diagnostic services contract, and successfully acting for Telecom in defending a major misuse of market power claim by the Commerce Commission. Jack is listed as a leading dispute resolution lawyer in Chambers Global, Asia Pacific Legal 500, PLC Which Lawyer? and Legal Media Group Guide to the World’s Leading Litigation Lawyers.
Jacob Heida is an international expert on the manufacturing and safety of foods and food components. He is an expert in whey production processes and standards for infant food ingredients and a current member of the Disciplinary Committee of the Netherlands Controlling Authority for Milk and Milk Products.
Gabrielle Trainor is a non-executive director, mentor and advisor to large organisations on the management of difficult issues. She is a founding partner of John Connolly & Partners, a specialist public affairs and communications firm. She has advised large listed companies and other organisations on the management of significant issues, including many critical incidents, across stakeholder groups including in capital markets, government, communities, NGO’s, commentators and other influencers. Her previous background is as a lawyer, newspaper journalist and public sector executive. She is a member of the board of Leighton Contractors (advisory), a director of the Barangaroo Delivery Authority, Business Events Sydney, Cape York Group, the Aurora Education Foundation and is a trustee of the Charlie Perkins Education Trust and a member of the Council of the Australian War Memorial. She is a member of the board of trustees of the University of Western Sydney. She is Chair of the National Film and Sound Archive and Chair of Barnardo’s Australia.
The findings and recommendations of Independent Inquiry were released on 29 October.
The report is wide-ranging and thorough and provides Fonterra management with in-depth observations. It explores what happened and why, and provides a comprehensive set of recommendations to assist Fonterra in maintaining and enhancing its position as a global dairy leader.