Board Constitution
A new constitution was adopted at the February 2004 general meeting of the Company to enable the listing of the Company. This constitution provides for nine directors with a minimum four supplier directors.
The current Board consists of nine directors and one associate director. The 9 directors comprise five supplier directors (Messrs Drake, Richardson, Anderson and Vallance), three non-supplier directors (Messrs Davis, Morley, Bourke and Carroll) and one executive director (Managing Director Mr McLean). Further details of the directors are given in the Statutory Report section of this report.
The Board after adopting legal advice from the Company solicitors determined that the "supplier directors" could not be regarded as "independent" within the meaning of the ASX Governance Council Guidelines (Guidelines) having regard to their personal and material interest in milk supply contracts with the Company.
Thus, the Board does not consist of a majority of "independent" members as recommended by the Guidelines. The predominance of supplier directors on the Board has been the situation as a result of the co-operative culture of the Company that has been prevalent over the last century and a reflection of the shareholding in the Company over many generations and decades.
Subject to the minimum number of supplier directors required by the new constitution, the proportion of and appointment of supplier directors will be determined by shareholders. As detailed below in the discussion of Board Committees, any potential for a conflict of interest to arise between supplier directors and the Board's responsibility to determine the milk price paid to suppliers to the Company has been excluded by the composition and process of the Milk Pricing Committee.
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