CIGI, Cereals Canada merger?

Cereals Canada and the Canadian International Grains Institute have taken the first step toward amalgamation.

Officials with the two organizations confirmed late last month that they have reviewed the benefits of amalgamation and have signed a letter of intent to form a single entity.

If an amalgamation is approved, the new body would be governed by a single board of directors and managed by a unified management team.

The goal, as outlined in the letter of intent, is to complete the amalgamation by March 31, 2020, contingent upon approval by the member organizations of both Cereals Canada and CIGI.

“Over the past months, the boards of the Canadian International Grains Institute and Cereals Canada have reviewed the benefits and synergies that would arise from amalgamating the organizations under the governance of a single board of directors and unified management team,” says a joint statement posted on the Cereal Canada website.

“During the past week, both boards have met and agreed to sign a letter of intent to pursue amalgamation.…

“The management teams of Cereals Canada and CIGI are charged with the development of a comprehensive governance structure that will be presented to both boards for approval and to allow the boards to bring forward recommendations to the respective member organizations.”

If approved, the new organization would follow five key principles:

  • It would be national in scope and its membership would comprise organizations with an interest in the Canadian grain business.
  • All pillars of the Canadian grain business would be represented, including growers, life science and seed companies, grain handlers and exporters, and processors.
  • Representation on the organization’s board would be based on membership dues, meaning members that pay more will have greater representation at the board level.
  • Direct participation on the board is not the same as participation in the activities of the organization. The board is responsible for the strategic direction and annual approval of the activities and budget of the organization. All members, whether or not they are directly represented on the board, would have the opportunity to participate in the priority setting and feedback on activities of the organization at the annual general meeting and on standing and ad hoc committees, for example.
  • The organization will strive for consensus decision making at both the board and member levels, with clear consultative processes  established to help reach consensus. A clear process to allow for member dissent will be established for cases where consensus is not possible. 

Cereals Canada president Cam Dahl said the amalgamation proposal is another step in the evolution of the Canadian cereal grains sector.

“I think if you started with a white board and asked yourself what would an organization that (serves) … the cereal grain industry look like, it probably wouldn’t involve two separate organizations,” Dahl said.

“I really do think there are significant benefits in moving forward with a single organization.”

Dahl said the main benefits would be related to the effectiveness and efficiency of a unified organization.

“We’re already working together on many issues, but still that’s not the same as being under the same board and being under the same management team.

“Having that unified direction, I think, will be very valuable and will make the organization more effective, just in terms of internal communications and communications with the public and communications with government.

“Internally, being able to have that cross-collaboration happen a bit more effectively will, I think, be extremely valuable.”

Dahl said management teams at Cereals Canada and CIGI will be working together to flesh out details of what a new governance model would look like, how board seats would be divided and how membership dues would be determined.

After a basic plan has been formulated, the proposal would be presented to the boards of the respective organizations, which would make a recommendation to their members.

“Ultimately, it’s the memberships of the organizations that will have the final say.”

Membership approval would likely be obtained through a vote, with each organization requiring a minimum of two-thirds support among its voting members.

Membership at Cereals Canada comprises groups within three pillars: grain handling companies and processors; grower organizations; and industry stakeholders.

“I think when we first started the discussions, there was some questions and some nervousness, but at this point, we’re looking forward to moving ahead,” Dahl said.

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