PROCEDURE FOR THE ELECTION OF SUPPLIER DIRECTORS

Transcription

1 PROCEDURE FOR THE ELECTION OF SUPPLIER DIRECTORS 1 Summary (f) Directors of Murray Goulburn Co-operative Co. Limited (Murray Goulburn) (other than the Managing Director and any Special Directors) must be nominated for election to the Board by a Murray Goulburn supplier region i.e. by Gippsland Region, Western Region or Northern Region (or any new supplier region established by the Board from time to time). Successful nominees will stand for election as a Director at the next Annual General Meeting (AGM) of Murray Goulburn, where they will need the support of a simple majority (i.e. 50%) of voting shareholders to be elected. Directors will hold office for a three year term. Each Director who has been appointed from a particular supplier region will retire from office in the same year in a set sequence. For example, Directors from the Northern Region are due to retire in 2017 (and each third year thereafter), Directors from the Gippsland Region are due to retire in 2018 (and each third year thereafter) and Directors from the Western Region are due to retire in 2019 (and each third year thereafter). The Board will determine the number of Director candidate positions available for a particular supply region, with regard to the above sequence and the minimum/maximum number of Supplier Directors permitted under Murray Goulburn s Constitution. Nominations to fill vacancies will be called for from the relevant supplier region in accordance with the Board s determination of Director candidate numbers for a supply region. The Managing Director and any Special Directors (i.e. a non-supplier, independent Director) will be appointed by the Board in accordance with Murray Goulburn s Constitution. Supplier Directors (who will comprise a majority of the Board) will be appointed in accordance with these procedures. A timetable setting out the applicable dates for the nomination of Directors and election of Directors will be placed on Murray Goulburn s website each year in June. 2 Eligibility to nominate and to be nominated To be eligible for nomination as a Director candidate, a person must: (1) be a member of Murray Goulburn; (2) be a current supplier to a Murray Goulburn entity at the time of nomination; (3) be allocated to the same supplier region as the nominator(s) at the time of the nomination; (4) not have disposed of any milk or cream they have produced in any of the pick up areas of Murray Goulburn other than as a supplier to the Murray Goulburn Group in the 12 months prior to nomination; (5) in respect of any trading activities with Murray Goulburn or any other member of the Murray Goulburn Group, not have any debt which is due and payable but remains outstanding (in full or in part) beyond the period allowed by Murray Goulburn; ABN Freshwater Place, Level 15, 2 Southbank Boulevard, Southbank VIC 3006 T: F: GPO BOX 4307, Melbourne 3001

2 2 (6) not be a party to an unresolved claim or dispute by or with or in relation to Murray Goulburn or any other member of the Murray Goulburn Group; (7) not be prevented or disqualified from holding office as a Director under any of the provisions of the Corporations Act; (8) not be a partner, employee or employer of an auditor of Murray Goulburn; and (9) hold at least 10,000 ordinary shares in Murray Goulburn (which must be held solely in his or her name and not as one of several joint holders). No person is eligible to be elected as a Director unless they have been nominated by at least 5 members (a controlled entity of the nominee cannot be counted towards the 5 nominators). Each of the nominators must be allocated to the relevant supplier region and hold ordinary shares (either alone or jointly with any other person). 3 Nomination procedure Around mid-june each year, the Company Secretary or the appointed Returning Officer will call for nominations for Director candidates and confirm a date by which nominations are to be received by Murray Goulburn (either at its head office at Level 15 Freshwater Place, 2 Southbank Boulevard, Southbank, Victoria 3006 Attention: Company Secretary or other address nominated by Murray Goulburn). Members allocated to a supplier region may nominate one or more members from that region as a Director to fill any vacancy in the office of a Director which is to be filled by suppliers allocated to that region. Each nominee, and the nominating members, must sign and lodge a nomination in the form prescribed (which will include a confirmation of eligibility of the nominee and each of the nominating members). Each nominee must also provide a personal profile and photograph for distribution with voting papers. Nomination forms are available either on Murray Goulburn s website at or by contacting the Company Secretary. If there are the same number of valid nominations, or less valid nominations, than the number of vacancies on the Board allocated to that supplier region, no regional ballot will be held and the nominee(s) will be declared the region s Director candidates. If there are more valid nominations than the number of vacancies allocated to that region, a ballot of voting shareholders in the relevant region will be conducted for the purpose of deciding which nominees will be the region s Director candidates to be put forward for election at Murray Goulburn s next AGM. 4 Director key competencies The Board has determined key competencies that it considers are important for directors to possess to perform their duties and responsibilities and to effectively contribute as a member of the Board of Murray Goulburn. The following key competencies are intended to attract high quality Director candidates to the Board and to ensure all prospective candidates clearly understand what is expected and required for effective performance as a director on the Board: Industry knowledge: Strong understanding of the drivers of Murray Goulburn s business and knowledge of dairy structures and pricing; Knowledge of directors responsibilities: Experience and an understanding of good corporate governance and the role of a director, including legal, ethical and fiduciary responsibilities;

3 3 Strategic thinking: Experience in, or an understanding of, the development and review of strategy through constructive questioning and the ability to contribute to the effective decision-making of the Board; Finance and accounting: Understanding of Murray Goulburn s financial reporting requirements, the ability to read and comprehend Murray Goulburn s financial accounts and some understanding of corporate finance; Risk management: Experience in, or an understanding of, what is meant by organisational risk, and the role and responsibilities of directors in managing risk; Managing people and achieving change: Experience in people management and human resources at a senior level in an organisation; and Commercial experience: Experience in and responsibility for driving significant value creation for a business or organisation, and demonstrable business acumen and instinct. The Board believes it is important that Directors have the skills and experience needed to deliver a high level of governance at Murray Goulburn to set up the business for success. Prospective Director candidates are encouraged to consider their skills and experience in the context of these key competencies. 5 Candidate assessment process (f) (g) The Board has introduced a voluntary process by which Director candidates for election can be assessed on their capabilities, experience and qualifications for directorship. To facilitate this process, the Board will assess Director candidates, by way of a structured interview, against each of the following key competencies (explained in section 4): industry knowledge; knowledge of directors responsibilities; strategic thinking; finance and accounting; risk management; managing people and achieving change; and commercial experience. The Board will assess each Director candidate (who has provided their consent to participate in the candidate assessment process) on each key competency and will determine whether or not to endorse each candidate for election. The Board may also undertake credential, character and reference checks of Director candidates as it considers appropriate. The Board will communicate to each participating candidate the outcome of their assessment. The Board will communicate to shareholders the outcome of the candidate assessment prior to the commencement of the ballot process for those Director elections. It is acknowledged that a Director candidate may not possess each key competency, and that a candidate may be able to demonstrate strengths or potential in some or all of the key competencies that would still make them worthy of consideration for election. The assessment outcomes are intended to provide useful information for

4 4 shareholders when making voting decisions. The Board will not rank candidates nor assess candidates against existing directors. 5 Ballot procedures The result of the ballot will be determined on a first past the post basis and there will be no provision for distribution of preferences. Members must tick as many names on the ballot paper as there are vacancies on the Board allocated to their region. For example, if there are three vacancies to be filled by suppliers from a particular region, members from that region will need to tick three boxes in order for their vote to be valid. Each member who is a supplier and who is allocated to a supplier region shall have the same number of votes on a ballot as that member is entitled to on a poll at an AGM of Murray Goulburn (i.e. in accordance with Clause of the Constitution). The person who receives the highest number of votes shall be deemed to be a candidate for election to the Board in respect of their supplier region. If there is more than one vacancy on the Board to be filled by suppliers allocated to a particular supplier region, the person who receives the second-highest number of votes under the ballot shall be deemed to be the candidate for the second vacancy, and so on until there is a candidate for each vacancy. The date for return of ballot papers will be no more than 12 weeks from the initial date on which nominations were sought. 6 Returning Officer A Returning Officer may be appointed by the Board. The determination of the Returning Officer in relation to the right of any person to vote or the result of the ballot (in the absence of fraud) shall be final and conclusive for all purposes and shall not be open to challenge in any way. 7 Election as Director Nominees who are selected as candidates in accordance with the procedure outlined above will then be eligible for election to the Board at the next AGM of Murray Goulburn. Resolutions seeking shareholder approval for their election will be proposed in the relevant notice of meeting, which is usually distributed to shareholders around a month before the AGM. To be elected, a simple majority of voting shareholders must vote in favour of their election at the AGM. 8 Retirement and re-election of Directors representing a supplier region As outlined above, each Director who has been appointed from a particular supplier region will retire from office in the same year in the following sequence: Supplier Region Gippsland Region Western Region Northern Region Any new supplier region Year of retirement 2015 and each third year thereafter 2016 and each third year thereafter 2017 and each third year thereafter The year of the third AGM following the establishment of the new supplier region, and each third year thereafter

5 5 9 Disqualification from office The office of a Director becomes vacant: (1) in the circumstances prescribed by law; (2) if at any time the Director (other than the Managing Director or any Special Director) ceases to hold or does not hold 10,000 ordinary shares (in their own name) (unless the Board resolves otherwise); (3) if the Director becomes bankrupt or of unsound mind or a person who is, or whose estate is, liable to be dealt with in any way under the law relating to mental health; (4) if the Director resigns by notice in writing to Murray Goulburn; (5) if the Director absents himself or herself from four consecutive meetings of the Board without special leave from the Board; or (6) if that Director (other than the Managing Director or any Special Director) ceases to or proposes to cease to supply to Murray Goulburn the whole of the milk and/or cream produced within the pick up area of Murray Goulburn and marketed by that Director or that Director s business entity (unless the Board resolves otherwise). Date: June 2017