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Farmer graduates to top table
2010-01-01
Fonterra’s newest director, Nicola Shadbolt, and her husband Shane Carroll had their timing right when they put together an equity partnership in April 1987, just before the sharemarket crash.
The four equal partners in the dairy, sheep and beef, deer and forestry operation at Pohangina have stayed together, extended their holdings and remained successful.
Timing, too, was behind the Massey University associate professor’s decision to stand for the Fonterra board. With the last of her three sons nearing the end of his secondary education, she was looking to get back into a governance role of some kind.
She has worked for the Ministry of Agriculture and Forestry (MAF), PGG Wrightson, and AgricultureNZ as a farm consultant, and in research at Lincoln University on the way to collecting a masters of agricultural science with honours in farm management.
Since then, she was for seven years on the board of Transit New Zealand, and was an appointed member on the Manawatu-Wanganui Regional Council (now Horizons) for two years (Dairy Exporter, November 2009, page 27). She also spent nine years as a trustee of Huntley School in Marton. Sons James, 22, Matthew, 19 and Christopher, 16, all attended the school.
Common goal
When it became known that she was considering a return to a governance role, she was approached by a number of parties interested in supporting her as a Fonterra board candidate. While she won’t identify the groups, she said they all had a common goal – to see the cooperative spirit of Fonterra protected.
Having started out as sharefarmers, Nicola and Shane feel it has helped them make a success of the equity partnerships and other ventures in which they have been involved.
Their Pohangina operation, to which a dairying business was added two years after the partnership was set up, won the Horizons Ballance Farm Environment supreme award in 2006 (Dairy Exporter, July 2006, page 55).
They started dairying by buying a 40ha farm on the flood-prone flats beside the Pohangina River, eventually building it up to 158ha. Three staff milk 430 Friesian Jersey crossbred cows , a third of which are autumn calved and winter milked once-a-day (OAD). Production is around 145,000kg milksolids (MS)/year or 337kg MS/cow.
Dairying ‘passion’
The partnership is also involved in another property near Ashhurst, carrying 530 cows.
“Dairy farming is a passion for our family,” she said.
Her sons have all earned pocket money by relief milking for the partnership.
“I have a strong understanding of the issues facing farmers and I am committed to delivering sustainable solutions to the challenges.”
She will integrate her Fonterra board duties with her other principal role in farm and agribusiness management at Massey. While she will have slightly less contact with students, she said teaching is what she most enjoys and will not give up the role easily.
She campaigned on her skill set of agribusiness, academic and practical farming experience, coupled with an international perspective as the New Zealand representative since 2000 on the International Farm Comparison Network (IFCN) in dairying. This is where 46 countries’ representatives compare the cost of production of milk and other aspects of dairying.
“Every time I meet with dairy farmers and industry people overseas they tell me how envious they are of New Zealand farmers,” she said.
“They wish their countries had something with the scale and ability that we have with Fonterra.
“There are other cooperatives with similar scale, but few that have the flexibility of structure to respond, as Fonterra does, to global opportunities. Fonterra should be the company that people aspire to join. We should attract, develop and retain the best but we should also ensure our staff understand how and why cooperatives differ from corporates.
Privilege
“Being a farmer shareholder of this cooperative is a privilege that we should be able to enjoy and never lose.”
She believes Fonterra has a healthy tension between management and shareholders.
“The executive is instructed to pay as much as it can to shareholders [both in milk price and dividends] but at the same time not diminish the value of the shares,” she said.
“To deliver to this double-edged sword we must be the provider of choice of dairy products to our global markets and then focus on efficiency through the supply chain.
“Innovation is key, whether it be how to improve efficiency to ensure the carbon footprint is minimised, or how to respond with product to better meet changing consumer needs or perceptions. Farmers will always play a critical role in delivering the Fonterra strategy.”
However, she had stressed during her contact with shareholders during the election roadshow that, despite the opportunities, distractions were taking people off course.
“My concern, especially in recent years when milk prices were high, has been the low retention in Fonterra,” she said.
“This is unusual and unsustainable. It would appear that one reason for this is to minimise the increase in share value and thus decrease redemption risk.
“If Fonterra dairy farmers are to benefit from a successful cooperative now and in the future, it must be through a sustainable milk price, a strong dividend and an improving share value.”
As the first woman elected to the board – the only other, Marise James, was appointed – Shadbolt recognises the uniqueness of the position. But she believes the issue is about contribution, not gender, and that her background will enable her to fully contribute to Fonterra’s governance