Dairy Australia’s Board faces the question of remuneration at upcoming AGM

Matthew Trace, Vice President of the Queensland Dairyfarmers’ Organisation (QDO) questions whether increasing Dairy Australia director fees will help dairy farmers improve profitability
Matthew Trace, Vice President QDO, asks if paying Dairy Australia Directors increased fees from $430,000 to $490,000 pa is justified

With the political and media attention that the ongoing work on the Australian Dairy Plan is generating, there is intense scrutiny on the lead organisations of the plan and particularly given some of the expenditures of farmer levy funds by Dairy Australia (DA).

Matthew Trace, Vice President of the QDO, says he is baffled by some of the motions that are to be voted upon at upcoming AGM on 28 November that were listed in the papers sent out to Group A members of DA.

Matthew Trace’s argument follows:

“I am struggling to understand how Dairy Australia thought that the $60,0000 increase to the aggregate remuneration of the Directors (other than the Managing Director) in the Board Director fees was appropriate given the questions that have been raised publicly about excessive expenditure including last year’s furore over a $10,000 coffee machine for DA’s Melbourne office.

“To be clear, Dairy Australia’s Board is comprised of eight non-executive Directors (including the Chair) so this proposed $60,000 increase to allow for an anticipated increase for ‘future years’ would be shared across the pool of directors.

“This is a role that should be taken on not for the financial compensation of the Director fees but because you have a strong desire to work for the good of your fellow members and the ongoing success and profitability of the dairy industry.

“It is no wonder that there are high politics being played in a number of back rooms to keep a seat at the table for the old guard.

“At times like this, all organisations working for the dairy industry should be looking at ways to cut costs, not blow them out.

“The DA proposed increase to the aggregate pool will take the Directors fees from $430,000 to $490,000. According to the 2016 Remuneration Survey by the Australian Institute of Company Directors, the average board fee for not-for-profits is listed at $25,930. DA’s average Director fee already sits at $53,750, over twice that amount.

“The papers provided for Item of Business 3: Directors aggregate pool certainly provides an extensive attempt to justify the proposed increase, but it does not justify it for me.

“We need Dairy Australia to be focussing on the needs of the farmers it is employed to serve. We need an extension strategy that achieves best practice on farm, a strategic plan that has a clearly defined focus on achieving change.

“We need the governance and transparency in decision making that gives farmers confidence the board is putting farmers first. 

“Will paying extra to Dairy Australia Directors help to achieve any of the changes I have suggested above? No, in fact, it’s likely to cement the position that everything is fine in the dairy industry and we just need the season to improve. 

“I can accept that resolution #1 of the ADP which relates to the major restructuring of the national bodies is still a work in progress and that business must carry on until this happens. I do not accept an increase to the already inflated Directors fees for a not-for-profit organisation that is run using the compulsory levy fees of grassroots dairy farmers.

“I will be using my voting rights at this year’s DA election to ensure that I have a say over the future of my levy funds.”

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