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Thursday, April 18, 2024

Why is change needed on the MIL board?

During a recent Denimein landholder AGM, participants received updates from a requesting director who conveyed the findings from a mediator, indicating:

  • The board purportedly operates at a mere 10% capacity, a conclusion drawn from scrutinizing historical minutes spanning an extended period. Despite initial objections from the chair, this assessment has since been validated.

The question arises: does this reflect an attentive and focused board? Is this the kind of leadership deemed suitable to guide the company through pivotal endeavors such as buybacks, canal agreement negotiations (slated for June 30), business review implementation, NSW Murray general security water sales, and a $400 million asset renewal initiative?

Directors Fawns, Mauger, and Barry didn’t take the decision lightly to propose the removal of independent directors. At the Denimein assembly, it was revealed that mediation lacks a clear endpoint, projected costs to the company, or a concrete plan for progression. Notably, the mediation process has already incurred a $30,000 expense, with ongoing attempts to resolve matters.

While shareholders, like SRI, wished for successful alternative dispute resolution, there comes a point where the board’s dysfunctionality and 10% operational capacity must be addressed. Hence, a general meeting is scheduled for April 10th. Shareholders are urged to familiarize themselves with these critical issues and reach out to directors for clarifications.

The MIL board charter, accessible on the website, delineates the pivotal responsibilities of a functioning board, including endorsing strategy, business plans, and policies. It’s disconcerting to witness a board functioning at a mere 10% capacity, far below acceptable standards.

Confirmation from the chair reveals that one ‘independent’ director is currently contracted to implement IT. Another independent director publicly asserts that the existing canal agreement of $4 million plus conveyance suffices, contrary to the majority of shareholders’ stance.

In navigating these challenges, MIL requires a cohesive and effective board. On April 10th, shareholders face a critical decision: either continue with a board operating at 10% capacity and uphold the status quo, or vote for change to enhance board performance.

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