AWI governance and performance facing fresh political scrutiny

It’s expected the examination of the embattled research and marketing agency for the Australian sheep and wool industry will be raised when AWI Chair Wal Merriman again faces questioning at Senate estimates hearings in Canberra today.

Last time Mr Merriman appeared before the Senate Rural and Regional Affairs and Transport Committee, in October last year, he apologised for bringing disrepute upon AWI and wool levy-payers for swearing at a journalist - which he described the language as “more fitting to a shearing shed” - and the now infamous one way mirror incident.

It’s understood Mr Littleproud’s Department of Agriculture and Water Resources has been requested to engage an independent reviewer to look into AWI performance and governance issues that have been questioned by wool-growers, in the wake of recent controversies; including concerns about ‘extremely generous’ severance payments made to ex-staff during a restructure process, which raised the ire of NSW Nationals Senator John “Wacka” Williams.

Mr Littleproud said the review would be conducted over the next six months, ahead of WoolPoll 2018, to examine AWI’s performance and “additional matters of public interest raised over the past year”.

“The 42,000 wool levy payers have the right to expect their industry body to work hard in the interests of woolgrowers,” he said.

“This review gives all parties the ability to be fully informed.

“To keep this at arms-length my department will engage an independent reviewer.

“AWI stakeholders, including woolgrower representative groups, will have the opportunity to participate in the review.

“The findings will be made available to levy payers ahead of the industry’s WoolPoll this year to inform their vote.”

WoolPoll voting will take place over a six-week period between September 17 and November 2, 2018.

AWI CEO Stuart McCullough said, in a statement supplied by Mr Littleproud’s office, he group welcomed the independent review of performance as “a normal part of our business cycle”.

He said it was an opportunity for our stakeholders to see the benefits delivered for woolgrowers.

“At AWI we are always striving to deliver best performance for our woolgrowers and we believe that our governance procedures and operations are appropriate for our funding and business model, however we are more than happy to have this tested through our triennial performance review process,” he said.

WoolProducers said the review appeared to be an enhanced part of normal statutory reporting requirements for AWI, aligning with its business cycle.

WoolProducers CEO Jo Hall said after last year’s AWI Annual General Meeting, he group stated that they expected the AWI Board to improve their governance practices which had been demonstrated to be lacking in recent times – but the review would enable stakeholders to have input into the researcher’s operations.

“WoolProducers has been calling for more accountability and transparency to woolgrowers from the industry’s research, development and market body,” she said.

“As the representative of the single largest body of woolgrowers in the country, we will certainly be taking the opportunity have input into this process.”

AWI has also provided answers to an extensive range of questions taken on notice at the last estimates hearings; including about the allocation of proxy votes at director elections; AWI’s links with industry representation and consultation; and how much levy and government money is spent on research into mulesing alternatives and solutions.

Victorian Nationals Senator Bridget McKenzie also asked questions about whether AWI paid for Mr McCullough to attend Stanford University in 2013 and the nature of any study he undertook and if he attended any yoga instruction sessions while there.

In AWI’s response, it was confirmed Mr Mr McCullough attended the Stanford Executive Program – a general management program, designed for senior-level executives who will use this opportunity to make an even greater difference in their legacies, their careers, and their organisations’ future.

It was a six week course that ran from June 23 to August 3, 2013 and cost $64,654.00.

“The course related to the business of AWI through challenging and stretching Mr McCullough’s thinking, helping to shape the company’s future by pushing his conventionally held tolerances, in turn allowing support for improved innovation across all the company’s portfolios,” the response said.

“The course was also designed to progress and fine-tune his business administration skillset and broaden his strategic and creative thinking via exposure, problem solving and debate with attending peers, all of which has resulted in him being a stronger leader for AWI and its shareholders.

“Mr McCullough attended all guest speaker sessions that were offered as part of the Stanford Executive Program and were included in the tuition fees.

“Mr McCullough did not attend any of the exercise or yoga classes however these activities were included as part of the tuition cost.

“Upon completion of the course Mr McCullough returned directly to Australia - at the time Mr McCullough was remunerated a base salary of $350,000 per annum (Super was paid on top of this amount).”

AWI also agreed that a budget figure, including expenses, of $100,000 was agreed to and reflected in Mr McCullough’s Long Term Incentive Contract.

A copy of AWI’s investigation into the focus group meeting on genetics with stud breeders conducted by Axiom Consulting - where Mr Merriman observed proceedings through a one way mirror which triggered outrage and calls for an overhaul of governance practices – is also part of the raft of responses provided to the Committee.

In one response, AWI said it contracted Axiom to conduct the focus group which sub-contracted the work to Qualitative Research Group, with the contract between AWI and Axiom valued at $86,995.

AWI said since 2005, it had also “fast-tracked” its research, development and extension (RD&E) program into flystrike prevention and invested $59 million in animal health and welfare in this time, including $35m in flystrike prevention alone.