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Factors behind the Fonterra Shareholders' Rejection of the Board's Capital Restructuring Plan of 2007

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  • Nilsson, Jerker
  • Rydberg, Charlotta

Abstract

The New Zealand dairy cooperative Fonterra is one of the largest in the world. In 2007, its Board presented a capital restructuring proposal with the aim of reducing the equity redemption risk, solving members’ portfolio problems, and acquiring capital for the cooperative. The proposal indicated that external owners would be allowed, but that members would own most of the stock. The shareholders rejected the proposal. This analysis of why the proposal failed shows that two specific characteristics of Fonterra were primarily responsible: The shareholders considered the Fair Value Share to be instrumental in securing full member control and the Shareholders’ Council effectively channeled members’ opinions.

Suggested Citation

  • Nilsson, Jerker & Rydberg, Charlotta, 2015. "Factors behind the Fonterra Shareholders' Rejection of the Board's Capital Restructuring Plan of 2007," Journal of Cooperatives, NCERA-210, vol. 30, pages 1-27.
    • Handle: RePEc:ags:jlcoop:244026
    DOI: 10.22004/ag.econ.244026
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    References listed on IDEAS

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    Cited by:

    1. Chrysoula MORFI & Jerker NILSSON & Hanna ÖSTERBERG, 2018. "Why Farmers Involve Themselves In Co‐Operative District Councils," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(4), pages 581-598, December.
    2. Hendrikse, G.W.J. & Nillson, J., 2022. "Board Structure Variety in Cooperatives," ERIM Report Series Research in Management ERS-2022-006-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    3. Karin Hakelius & Jerker Nilsson, 2020. "The Logic behind the Internal Governance of Sweden’s Largest Agricultural Cooperatives," Sustainability, MDPI, vol. 12(21), pages 1-19, October.

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