Shareholders vote to save independents

The directors voluntarily resigned as a result of the company’s April 10 general meeting which saw their resolutions to remove non-member directors Trisha Gorman and Robert Burbury fail to pass.

After several weeks of debate which spilled into the local media, motions were put to shareholders at the meeting, held at the Deniliquin RSL Club.

Shareholders sent a strong message of dissatisfaction however, with the division in votes for each motion being about 200 votes.

The vote to remove Mrs Gorman was lost with 552 people voting for removal and 740 voting against. Six people abstained from voting.

The vote to remove Mr Burbury was lost with 543 people voting for removal and 745 against. Ten people abstained form voting.

The result triggered the pre-vote commitments of Mr Fawns, Mr Mauger and Mr Barry to resign from the board, despite a last minute attempt to withdraw their resignations.

The trio made the request the night before the meeting, but after obtaining advice the company said the commitments were “irrevocable”.

Their Murray Irrigation Limited email addresses were shut down Wednesday afternoon, and their profiles removed from the company website.

Murray Irrigation’s constitution requires a minimum of six directors on the board.

The remaining directors - chair Phillip Snowden, deputy chair Lachlan Marshall, Mrs Gorman and Mr Burbury - convened a formal board meeting on Thursday and resolved to call for nominations to appoint at least two new directors.

An independent selection committee will be established to consider eligible nominations and recommend preferred candidates to the board for approval.

Those appointments will then be ratified by shareholders at the company’s 2024 annual general meeting in November.

Mr Snowden said the company is seeking candidates who are the right fit for the organisation.

“All nominations will be independently assessed for the skills and experience they can bring to the board,” he said.

“It is our hope that a number of women and the younger generation of irrigators put their hands up for the roles, as the diversity this will bring to the current skill set of the Board will bring great value to the future of MIL.

“We don’t want to rush the process and we want to ensure we find people who are the right fit for the board.”

Which is why the company is starting with recruitment of at least two directors to achieve that minimum quota.

In presenting their reasons for the removal of Ms Gorman and Mr Burbury, Mr Fawns, Mr Mauger and Mr Barry argued that neither had satisfactorily met the requirements of an independent director.

On behalf of the trio, Mr Mauger’s opening address highlighted that they were elected to the board in November “on a platform of change” and suggested that as independent directors Ms Gorman and Mr Burbury had failed to call out failures of the board to meet the benchmarks of the operational plan.

In particular reference to Ms Gorman they claimed she had not completed the required director’s course, had failed to deliver the agreed work plan as a member and chair of the committee looking at remuneration and had not been effective in improving corporate communication or the ICT strategy development.

They also claimed she did not fit the criteria of a director, which they listed as being someone with experience with communications and interpersonal skills and finance, engineering and governance skills.

In reference to Mr Burbury, the trio claimed he did not meet the criteria of a director, as listed above.

A question from the floor, from former MIL director Waander van Beek, also questioned the skills of the two non-shareholder directors in moving forward with the important discussions on water buybacks under the Murray-Darling Basin Plan and their knowledge in the water sphere.

When given her chance to speak to the motion on her removal, Ms Gorman said the projects she has been put in charge of had been pushed to the side because of the motions being brought.

She also defended her professional history which includes 20 years’ experience in both the private and the government sectors, including as an experienced information and communications technology consultant, and providing professional and business coaching services.

When given his chance to speak to the motion on his removal, Mr Burbury said while a director “can’t be an expert in every aspect”, he felt his 20 years as a company CEO, experience as an independent director for other companies and governance experience spoke for itself.

He also argued that the board could not be deemed ineffective as the requisitioning directors had inferred because it was meeting the objectives of the strategy and adovocacy plan to: deliver water efficiently and cost effectively; provision financially and physically for our infrastructure on an intergenerational basis for our grandchildren; advocate only on issues where MIL can materially influence; and develop a capable workforce, systems and processes which can deliver MIL’s mission.

During the more than two hour meeting, shareholders were given the opportunity to question any of the board members, with CEO Ron McCalman and company secretary Nathan Holahan also taking questions as required.

Comments were made about the pushing through of the business review which “some are far from happy with”, and how the requisitioning directors would rebuild and guarantee “the same level of performance or higher“ if the vote was won the two independent directors’ removals triggered the resignations of Mr Snowden, deputy chair Lachlan Marshall and company CEO Ron McCalman effective immediately.

Concerns were also raised about losing traction on the positive relationships the board has built in Canberra and relevant advisors and departments on water policy, including the Basin Plan.

Former MIL chair Mark Robertson sought a commitment from both sides of the argument to finally release the full report on an independent review conducted in 2017.

Mr Snowden committed to reviewing the report and, if not subject to confidentiality, consider releasing the material.

Multiple questions were raised about how the board - whichever side remained - would approach conflict resolution in the future to prevent a similar division in the board from playing out.

Mr McCalman and Mr Holahan were also asked to explain why shareholder contact details were given out to non-shareholder directors, after which Ms Gorman sent targeted text messages encouraging people to vote ‘no’ to the motions.

Mr McCalman did say this was allowable under MIL policy if requested, but Ms Gorman maintains she did not use the information and had her employees assist her with data mining to obtain the numbers required without personal information attached instead.

Mr Holahan said there were ongoing inquiries in regards to this matter, with an investigation to be conducted by independent auditors.

While the vote has concluded, Mr Holahan said the company understands the process has been difficult for everyone involved, including shareholders.

For that reason, the free counselling service for MIL staff has been extended to shareholders temporarily.

“In recognition of the difficult circumstances Murray Irrigation and its shareholders are currently facing, the company is extending its Employee Assistance Program (EAP) free of charge to all shareholders until May 8.

“Throughout this period, AccessEAP is also providing an additional dedicated phone support service, where 30-minute confidential counselling sessions can be pre-booked.

“This service is entirely confidential and available to all shareholders who feel they need extra care and support through this time.”

Board nominations are welcome for both member director and non-member director roles.

Nominations will remain open for about two weeks, with the company’s target to have a new board in place by May 8.

For more information on nominating. view the April 12 shareholder announcement at www.murrayirrigation.com.au/news#CompanyAnnouncements.

A candidate information session is being planned, with details to be released as soon as finalised.