VFF board battle: New non-farming director appointed

The VFF board has ignored its own constitution to appoint a new non-farming director.

VFF Grains Group president Craig Henderson has asked how the board can appoint another director without a quorum of five. Picture: David Geraghty

Four directors of the Victorian Farmers Federation have voted a new non-farming specialist director onto the board, ignoring their own constitution that demands a quorum of five for any decision.

The appointment of specialist director James Downing was rushed through yesterday, via a resolution circulated to directors via email, despite the Clause 10.3.5 of the VFF’s current constitution stating “a quorum at a meeting of the Board shall be at least five directors”.

The move came after Meg Parkinson, Peter Star and Craig Henderson resigned as directors on Tuesday, due to what they called a “lack of positive culture at the board and a lack of consultation with either the board or members – enough is enough”, leaving the seven member-board one short of quorum.

VFF president Emma Germano stated the “VFF Board can continue to operate in accordance with the Corporations Act”, which states quorum is just two directors.

Yet the Australian Securities and Investments Commission’s website states setting quorum at just two is a “replaceable rule”, which can be overridden by a company’s own constitution – which in the VFF’s case is five.

Associations Forum adviser on corporate governance Shaughn Morgan, who is also a former chief executive to NSW Farmers and Dairy Connect, said: “I think the president is on very shaky ground”.

“In my view the VFF would need to amend their quorum clause, either reduce the number required for quorum or delete the clause, in their constitution for the Corporations Law minimum requirement to apply,” Mr Morgan said.

Ms Germano ignored questions on the VFF constitutional quorum put to her by The Weekly Times on Wednesday morning.

But that afternoon she and her three fellow directors rushed through Mr Downing’s appointment to bring the number of VFF directors to five.

The board then issued a communique stating that had appointed Mr Downing as a special skills director “after an extensive external search conducted from March of 2023 by Pacific Search Partners and the VFF nominations committee”.

“James brings to the board a wealth of governance and financial expertise, leadership qualities, and an ability to foster a collaborative and constructive boardroom environment. We look forward to his contribution and believe him to be an ideal candidate for one of two available special skills director positions at the VFF.”

The board stated it made the appointment by circular resolution without an in-person meeting as it is entitled to do under the VFF Constitution clause 10.4.

But that clause does not override the need for a quorum of five, as stated in the current constitution.

Clause 10.4 simply states: “If all directors sign a document containing a statement that they are in favour of a resolution of the board in terms set out in the document, a resolution on those terms shall be deemed to have passed at a meeting of the directors held on the day and at the time at which the document was last signed by a director”.

Under this clause all remaining directors – Ms Germano, the United Dairyfarmers of Victoria representative Craig Dwyer, horticulture director Nathan Free and VFF vice president Danyel Cucinotta must have signed the resolution.

Ms Germano is also forging ahead with amendments to the VFF constitution, which strip its commodity councils of power.