AWI shake up comes at a cost

Changes come with a cost


Wool
Challenging times: AWI CEO Stuart McCullough said staff morale had taken a hit in recent months.

Challenging times: AWI CEO Stuart McCullough said staff morale had taken a hit in recent months.

Aa

In the most forensic review to date, AWI CEO says it has cost the company in both dollar and human hour investment terms.

Aa

When the independent review into the performance of Australian Wool Innovation (AWI) was released last week, Minister for Agriculture, David Littleproud said he expected all 82 recommendations to be implemented. 

In the most forensic review of AWI to date, independent consultants Ernst and Young (EY) made recommendations including limiting board terms to 10 years; moving to a skills-based board; more transparency around proxy voting and governance; and better communication with stakeholders.

While the Federal Government provides $15 million to AWI each year, it does not govern the organisation — meaning it is up to AWI itself to implement the recommendations.

That challenge was expected to be front of mind for AWI board members who met on Wednesday this week – the first time since the review was handed down.

Chief Executive Officer of AWI Stuart McCullough said the “particularly deep and thorough” review had cost the company significantly in both dollar and human hour investment terms.  

“A huge amount of time and energy was dedicated to making the review happen and now there is a lot of work to do to deliver the recommendations,” Mr McCullough said. 

“When you triple the terms of reference you expect the cost to be triple as well.

“We cannot implement these recommendations to the satisfaction of the government without it costing something in dollar and human resource terms, something we measure over the course of time.” 

Within the review, EY noted AWI had achieved a reduction in operational costs – something Mr McCullough said AWI were proud of achieving.

“We have prided ourselves on saving woolgrowers’ funds,” Mr McCullough said.

We have prided ourselves on saving woolgrowers’ funds - AWI CEO Stuart McCullough

“We have worked really hard to bring down operating costs and get as much of the woolgrowers’ funds to the coal face invested in real projects rather than being chewed up on operating costs on the way through.

“When we are through this there will be a significant cost to the company not to mention the morale and mood of the staff at AWI that despite my buffering efforts has taken a toll.” 

Mr McCullough said the vast majority of the recommendations could be actioned, but warned there were certain items that would require constitutional change.

“If you are looking to amend the constitution, you must go back to your shareholders and ask them for their view,” he said. 

Finding consensus among shareholders may prove difficult, if others share the view of growers like the former president of WA Stud Merino Breeders, Steven Bolt.

“Woolgrowers are looking down the barrel of losing control of their company,” he said. “Currently we have a voting system that allows growers 100 per cent control.

“If we want more of the same, as in the driven demand and top returns for our wool, then we need to continue to support the current system...and the current board that has delivered it for us.”

Aa

From the front page

Sponsored by