Eckhoff Gerrard: Wool Industry Restructuring Bill — Second Reading Instruction to CommitteeCWH In Committee Third Reading 
Eckhoff Gerrard: Wool Industry Restructuring Bill — Second Reading Instruction to CommitteeCWH In Committee Third Reading 
[Volume:609;Page:7122] 
GERRARD ECKHOFF (ACT NZ) 
: 
 I rise to speak briefly on Part 3. Clause 18 requires that the board must prepare a restructuring plan which is right and proper. But again I think the concern of the farming industry has been the question of who should prepare this restructuring plan rather than whether a plan should be invoked. I have heard comments that many members of the existing board will reinvent themselves in terms of these new structures. 
 To my certain knowledge the only person who has resurfaced is Mr Mark O’Grady who will be the chief executive under contract to Wool Equities. This is a fixed-term contract for a period of 2 years. It was essential according to Wool Equities that it have somebody with an in-depth knowledge of the industry to assist the new directors in their deliberations as to how they believe the governance of Wool Equities should take place. They needed somebody who had hands-on management experience. It is perhaps a very debatable question as to whether Mr O’Grady was responsible in whole or in part for the fortunes or misfortunes of the board in the past but in the judgment of the new board of Wool Equities he was deemed to be the best person suitable to assist the new board to come to grips with the complexities of the wool industry. 
I do not see the names of previous board members other board members or even current board members resurfacing. So I think the one fear perhaps justified that my colleagues have has perhaps been a little overstated when we look at Part 3. As I said earlier I think it is very important that the employment of individuals within this new structure generally speaking these days is under fixed-period contracts. If the growers decide they do not want a specific individual as their chief executive they can relay that to the board—indeed they can sack members of the board for having appointed this particular fellow and that is as it should be. But the governance of the board should be left to the people who now govern it. It is appropriate that they should have the right to make their appointment rather than the wider industry having a vote on it. It is just not practical. 
One of the concerns I have in the farming world is that many farmers do not understand that it is not their job to have a hands-on day-to-day influence over the running of a company whether it be Fonterra or whatever. We place that in the hands of the individual the chief executive and it is his or her job to perform in the role and to be accountable as well but essentially if the chief executive does not perform then hopefully his or her contract will not be renewed. 
However I do understand the concern of my colleague Mr Woolerton. It was a concern that I also held in a very genuine way. But after quiet reflection I have determined that it is appropriate that the new board of Wool Equities will determine whom it shall appoint and not have myself or other politicians stick their oar in and say that it is quite wrong to appoint a certain individual. That is the board’s choice and the directors of Wool Equities will stand or fall on the correctness of that choice. That is one contribution I would like to make to this part and I look forward to my colleagues’ contributions to Part 3.