Fonterra Shareholders' Council will continue to work with the Fonterra Board and farmers to implement an improved governance and representation structure, says council chairman Duncan Coull.

His comments follow today's special meeting where farmer shareholders failed to pass a resolution regarding changes to Fonterra's Constitution and Shareholders' Council By-laws.

Of the votes cast, 63.74 per cent were in favour of the changes but under Fonterra's Constitution, 75 per cent support was required for the changes to be accepted.

'The council's objective throughout has been to ensure that a robust final proposal was presented to shareholders for their consideration and we are confident this was delivered,” says Duncan.

'As the owners of Fonterra, it was then our farmers' right to determine the proposal's suitability – the mandate for change must come from them.

'Even though the 75 per cent threshold was Fonterrnot reached, the result indicates that the proposal was on the right track and that there is a willingness from shareholders to continue with the process."

As such, Duncan says the council will continue to work with the board and farmers as they seek to implement an improved governance and representation structure to ensure the strength of the co-op both now and in the years ahead.

'An important part of this will be the council's review of its role and functions. This will begin in the near future and we look forward to engaging with our shareholders during this process,” adds Duncan.

Fonterra Chairman John Wilson says today's vote is the co-operative working as it should.

He says they asked farmers to consider significant changes to the process for electing directors and a strong majority, almost two thirds of farmers, voted in favour of the recommendation.

'They want a system that gets the most knowledgeable and skilled candidates on to the board; and a process that encourages diversity and sees our most capable farmer shareholders put themselves forward," explains John.

'The fact that we didn't achieve the 75 per cent tells us that the change proposed was a big ask, particularly around the change from being able to choose from any and all candidates. The board respects that view.”

John says the governance and representation review has been a rigorous and positive process for the co-operative. It was important the co-operative remained focused on strengthening its governance and representation model.

He believes they owe it to their farmers and to New Zealand to move the co-operative forward by developing a model that gets the best possible talent onto the board in the future.

"I am confident we can develop a solution which secures a mandate."

Duncan says the high level of farmer participation is a highlight of the project.

'Providing multiple platforms from which our farmers could influence the build of the proposal from the ground up has made for a truly co-operative experience and I have received nothing but positive feedback on the process that has been undertaken.”