Australia’s largest pastoral company is the Australian Agricultural Company (AACo). Unfortunately, the AACo has continued to turn over yet more directors and upper level management in recent weeks (including today). Much to the dismay of AACo staff – both present & past; and, presumably, investors.
David Farley has been the Managing Director/CEO of AACo for the last 5 months. The other five board members are Nick Burton-Taylor, Chris Roberts, Felda IFFCO Sdn Bhd-nominated Arunas Paliulis and the most recent arrivals, Donald McGauchie and Felda-IFFCO-nominated Datuk Abdul Samad bin Haji (Abdul Samad). As of this morning, Peter Hughes is still listed on the AACo website as a Director however he will not stand for re-election when the AGM rolls around in a fortnight. Stephen Lonie resigned as Chairman in April, after less than 12 months in the job. Newest appointee (not yet listed on the AACo website) is Donald McGauchie, who will officially take up his position as AACo director after the May 19 AGM and take over as Chairman in August, from the Acting Chairman of several weeks to date, Nick Burton-Taylor.
Donald McGauchie lives on the family partnership-owned Terrick West, a grain growing farm and Poll Merino stud near Prairie, 65km north of Bendigo in Victoria. This is an area that would have seen more than it’s fair share of tough droughts over the years, including a savage caning for much of the last 5 years or so – with rainfall way below the 400mm annual average. Regions where it is hard to make a crust out of agriculture generally breed stoic, resourceful, hardworking and frugal people. Scottish Highlanders departed their homeland in droves in the mid 1800s (as did many Irish), in search of land they could work hard on and end up owning, and many Scottish names still predominate in pastoral Australia. They aren’t known for idleness, giving up, being anything other than fairly blunt, or for flamboyant expenditure.
Donald McGauchie is Chairman of the Australian Wool Testing Authority Limited (AWTA); a Director of Nufarm Limited, James Hardie Industries Ltd, Graincorp and a member of the Reserve Bank of Australia (RBA) board. He has previously been on the board of Telstra, National Foods, Ridley Corporation Limited, Chairman of Woolstock and past president of the National Farmers Federation (NFF). There is no doubt that Don McGauchie is an exceedingly busy & resourceful bloke, with extensive agribusiness experience.
Felda IFFCO Sdn Bhd (FISB) owns 19.9% of the AACo so logically Felda IFFCO would have a stake in the AACo board that amounts to the nearest equivalent (i.e., one sixth – one director on the board of 6). However, instead of an independent board member being appointed to replace one of the two recent departures, Malaysian Accountant Abdul Samad was nominated by Felda IFFCO and accepted by the board. (One can only wonder at what argument was used to justify this decision.) Abdul Samad will officially commence his AACo Directorship after the AACo AGM on 19th May 2010. Nick Burton-Taylor has just been quoted as saying: ‘The board is now well balanced, with an independent chairman, a majority of independent non-executive directors and representation from the larger shareholders.’
The Felda IFFCO investment in the AACo is actually a joint venture between Dubai-based IFFCO Poultry Co Ltd and the Malaysian-Government owned Felda Group. Rather than deeming it fair that this IFFCO/Felda partnership receives one director on the 6-member board, in return for their one-fifth investment , apparently IFFCO and Felda have now been handed one seat on the board each – i.e. a total board representation of 33%.
Some other media reports state that Abdul Samad replaced Peter Hughes. However as they both appear on the AACo website list of board members at the same time (as of today), and Stephen Lonie and Donald McGauchie do not, it looks more like Abdul Samad replaced Stephen Lonie, and Donald McGauchie is to fill the space left by Peter Hughes.
I don’t suppose there had actually been a plan (since scuttled?) to appoint Stephen Lonie’s successor as AACo Chairman?
Given the fact that the Felda IFFCO joint venture partnership holds less than one fifth of AACo shares but just been handed one third of the AACo board representation, it looks set to be another interesting AACo AGM on 19 May 2010.
I do not imagine the remaining 80% of AACo shareholders are happy about what can only be accurately described as lop-sided representation – nor the increase in overseas directorship from one to two.
Good luck to Donald McGauchie, it would be a relief to see some AACo board stability and more straight-forward operating rather than behind-the-scenes plotting, but given the events of the last few weeks, this seems exceedingly unlikely.
Tags: Pastoral companies