First Milk is to overhaul the way it is run, cutting the number of board members, top-level producer representatives and bringing in more commercial experience and expertise.
“The aim of the changes will be to create a smaller board with appropriate commercial skills, knowledge and experience while establishing a new council body to oversee the strategy of the business and represent the farmer owners,” said First Milk in a statement.
The proposals follow an independent review by consultancy Greenburn Associates and will be put to members for approval over the coming weeks.
First Milk chairman Sir Jim Paice said that the recent appointment of Brian Mackie as chief operating officer and Carl Ravenhall (formerly Muller Wiseman Dairies’ managing director) as a non-executive director meant that governance improvements had already begun.
Establishing a new board structure with significant commercial experience would ensure that the co-operative avoided some of the pitfalls of recent years, said chief executive Mike Gallacher, referring to the underperformance of the business and the need for faster decision-making.
The proposals include a board of seven directors (currently nine) with an independent commercial chairman, two external commercial non-executive directors, two farmer directors and the chief executive office and chief operating officer.
The current board has an independent chairman, another non-executive director, five farmer directors and two executive directors.
A seven-member council will replace the current 13 area representatives from milk fields, also with an independent chairman with commercial experience.
In June, Sir Jim Paice announced his intention to resign the chairmanship, telling members that the role needed someone with “real commercial and business skills”.
He will remain as chairman until a replacement is appointed.