A churn-up for the rule book
DAIRYGOLD shareholders meet in Mallow, Co Cork today to decide on a proposed rule book for the near e1 billion a year turnover co-op.
But some shareholders known as the Option B Group want the proposed changes rejected at the special general meeting at Cork Racecourse.
They also intend to move a motion of no confidence in the co-op's 10-man board of directors at the co-op's annual general meeting, which also takes place today, and to have them removed from office.
Dairygold, the Irish Co-operative Organisation Society (ICOS), the Irish Farmers Association (IFA) and the Irish Creamery Milk Suppliers Association (ICMSA) have all called on shareholders to support the rule change proposals.
The co-op warns that if the rule changes are not passed, the momentum for change will have been lost and a brake will have been put on the society's progress.
"We cannot reasonably ask our staff to accept wide-ranging changes if we as a society are unwilling to do likewise," it says.
However, the Option B group says the rule book aims to vest sweeping powers in the board.
A significant majority voted no confidence in the board last July only to see most of the directors returned under a system of election that is copper-fastened in the new rules.
Sean Keating of Kildorrery, Co Cork, spokesman for the group, said the resolution of no confidence in the board of directors is being brought in response to requests from a large number of shareholders.
They feel most of the board do not have a proper mandate to represent them and to allow this continue is unacceptable and inappropriate at a time of huge change for all farmers.
The group claims a large portion of the new rule book concentrates on putting obstacles in farmers' way, taking away their vote and diminishing their rights.
"Is it high time that someone applied the brakes and shouted stop? There is a better way to operate.
"We can take the first step in that direction by rejecting the proposed new rulebook. Then an alternative proposal which protects shareholders' rights and addresses the key issues can be put forward," the Option B group says.
It says shareholders should be wary when they are told that something is for their good in the future as past experience has told them otherwise.
Promised savings in the formation of Dairygold never happened, with duplication of resources and many other inefficiencies compromising milk price, they say.
Voting to take a 6p/gal price drop at a special general meeting in Millstreet to secure the society and help fund research and development was another bitter experience for many farmers.
They see direct elections to the board with all shareholders having a say as the best way forward for the new Dairygold.
Such a system would give the ordinary shareholder a real say in the running of their business, which has been denied for far too long, they say.
However, Dairygold say the proposed new rules are entirely appropriate for a co-op of its size, scale and nature.
"The members of the Rules Consultative Committee are urging all members to support this package and reject any other proposals which could have the unintended effect of leaving us further back than where we started," it says.
Dairygold says it has successfully completed the first phase in its recovery process the implementation of a necessary restructuring plan. The adoption of the new rule book will be vitally important in maintaining the momentum and helping secure Dairygold's growth strategy, the company says.
"It's time to embrace the new rulebook, which reflects broad consensus and delivers a framework for Dairygold to successfully build its business."
Dairygold chairman John Walsh says the proposals were discussed extensively in a wide-ranging programme of shareholder consultation.
Work on the rule book was completed, taking account of the consultation feedback, ICOS inputs and expert legal advice.
"The development of the proposed new rule book was a major but valuable undertaking which fully and equitably safeguards each shareholder's value."
Mr Walsh and vice-chairman Con Hallahan called on the co-op's members to attend today's meetings in large numbers.
"It is important that the attendance is strong and constructive, and that shareholders give a clear and comprehensive vote of confidence and mandate to Dairygold's board and management to implement and drive on with its current strategy," they say.
Meanwhile, the IFA, ICMSA and ICOS have called on Dairygold shareholders to adopt the proposed new rule book, which includes an offer of bonus shares to members.
IFA Dairy Committee chairman Michael Murphy says the pressure on milk price after the Fischler reforms, the need for tough action to bring down processing costs, the move away from intervention products and maintaining milk price are all good reasons why dairy farmers should support the proposed rule changes.
ICMSA president Pat O'Rourke urged Dairygold shareholders to stand 'strong and solid' behind the co-op and to give it a strong mandate at today's meetings to enable it to 'do the business' for farmers.
He says the ICMSA considers it vital that Dairygold shareholders turn out in large numbers and with determination to show support for the co-op's board and management in its ongoing rationalisation programme and to adopt the necessary new rule book for the society.
ICOS president Donal Cashman and director general John Tyrrell have also called for full support from Dairygold members for the proposed rule amendments.
