Saskatchewan Wheat Pool has taken the first step in its efforts to gain
control of decisions concerning ownership limits and board member
appointments.
On July 30, the pool’s board of directors agreed to ask delegates at a
special fall meeting to approve changes that would allow the company to
appoint board members who are not farmer delegates and allow single
investors to own more than 10 percent of the company. Class B
shareholders will be asked to approve the same changes at a Dec. 19
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shareholders meeting.
Ownership limits and board member appointments are now governed by
Saskatchewan legislation.
The pool plans to ask the provincial government to give it control of
these areas, but first two-thirds of delegates and class B shareholders
must approve the changes.
This will likely prompt a flurry of lobbying this summer at kitchen
tables, grain
elevators and coffee shops.
Pool leaders say they are confident they will win approval to go ahead
with the changes.
David Schroeder, an analyst who watches the Canadian grain industry for
Dom-inion Bond Rating Service, said both moves will help the pool
“modernize or become more progressive in the eyes of the marketplace.”
Pool chief executive officer Mayo Schmidt said being able to appoint
board members with banking or legal expertise would improve the board’s
decision-making ability.
“We don’t need anyone else with agricultural experience,” Schmidt said.
“Our directors have a solid understanding of ag. We need it in other
areas. It is a large and complex company. It would also improve our
flexibility.”
Pool president Marvin Wiens said share ownership was originally limited
to 10 percent when the company began selling public shares in 1996. It
was intended in part to “get support for the (share offering). It was a
big step for the members.” It was also intended to quell fears of a
takeover by a larger company.
“We aren’t talking now about a total removal of the cap. What the new
cap might be we haven’t decided. This would only give the board control
over these decisions … and the flexibility to make decisions more
quickly as opportunities arise.”
Pool legal adviser Susan Engle said the changes would give the board
increased rights to make changes to the ownership cap and appoint
non-farmer delegates to the board of directors.
“This will not affect voting rights,” she said.
Voting rights would still be held only by Class A shareholders and
their delegates, she added.
Schmidt said the changes would open the possibility of working with
other industry partners, but that “any material change in control (of
the company) would require delegate approval.”
Schroeder said partnerships and takeovers are both welcomed and feared
by pool members and the market.
“Further consolidation would not be a bad thing for the industry. Pool
refers to strategic alliances. It isn’t always clear what that means,
but working with other companies can only help the pool.”
Wiens said he expects the vote will pass and that the pool will ask the
legislature to pass the amendment to the act as soon as the government
sits in the spring of 2003.
