Chairman of Livestock Improvement Corporation (LIC), Nelson’s Murray King, pictured, received the Co-operative Leader of the Year award. He was recognised for his exceptional leadership while steering the agri-tech co-operative through a sustained period of disruption and uncertainty.
Co-operative Leader of the Year: Murray King | Chairman, Livestock Improvement Corporation (LIC)
This award is presented to an individual who has shown significant co-operative leadership either within a Members’ co-operative or the co-operative sector generally over the 2017/18 year. The nominee has clearly demonstrated:
- Co-operative leadership
- Vision and courage for the co-operative model
- Successful initiative(s) that have benefited their co-operative or the co-operative sector
- Commitment and support of well-recognised and accepted co-operative principles
Murray was elected to the LIC Board by his South Island peers in June 2009, became Chairman three years later and has been re-elected to the Board twice in 2013 and 2017.
His award is as a result of exceptional leadership shown over the past three years, and in particular during 2017/18, as he steered LIC through a period of significant change and challenge following the co-operative’s first ever loss recorded in 2016 as a result of farmers cutting back on spending due to the low milk price.
The LIC Board recognised the disruption and uncertainty faced by the dairy industry would require LIC to make changes to protect and grow the co-operative, and ensure it remained sustainable heading into the future.
LIC has never been shy of change – it has not been a traditional co-operative since it introduced its dual share structure in 2004. However, the Board appreciated that the rate of change and the increasing level of disruption required more than just a few tweaks. It embarked on a transformation process with the objective to ensure LIC remained a resilient and adaptive co-operative that was able to respond to the challenges and opportunities that lay ahead.
In the past three years the Board has undertaken a thorough review of LIC’s co-operative structure including its share structure. Murray has, through his leadership, ensured that the Board has stayed true to its stated aim of protecting the co-operative principles that are fundamental to LIC and which are key to how LIC operates. As a result, the LIC Board spent a significant amount of time considering the many options put forward for discussion. Murray led the Board through this and when others’ energy and enthusiasm might have waned, Murray continued to lead the change, retaining the focus of protecting and growing LIC and holding the Board to account for decisions on the way through.
This extensive piece of work can be summarised into four key steps:
- Separation of LIC into two businesses in December 2016, maintaining a co-operative core working with NZ’s dairy farmers and a wholly owned agri-technology subsidiary running the information technology, diagnostics, farm automation and international operations.
- Embarking on a business-wide transformation programme, committing LIC to finding ways to improve efficiencies and strengthen the existing business; this work continues.
- Refresh of LIC’s business strategy to set out a clear plan for future growth and how the co-operative will deliver value on farm and through investment in LIC.
- Share simplification to address the growing disparity between LIC’s two classes of shareholders by aligning the economic and voting rights of the two share classes, balancing the different values of the shares and making the share structure fair for all.
A letter in support of Murray’s nomination from LIC’s principal legal advisers (Simpson Grierson) formed part of his nomination and outlined the extensive and complex nature of the share simplification. Through all this LIC remains a dairy farmer–owned co-operative.
In implementing these changes outlined, the Board, led by Murray, committed to and undertook extensive shareholder, key stakeholder and media engagement. This culminated with two weeks on the road earlier this year talking to shareholders and often until late into the night. Through this whole process, Murray never baulked from his commitment, he was able to clearly articulate the problem and solution to key stakeholders, media and industry leaders. He would talk to any farmer on the topic and showed genuine, authentic leadership throughout.
Murray and the Board were clear that “protecting the co-operative principles that are fundamental to LIC” was non-negotiable and it became the foundation tenant of any change to the share structure.
Critically, Murray and the Board acted before LIC reached a crisis point and were able to act calmly and in control of the destiny of the co-operative.
The Board’s deliberations to find the best solutions proved to be very time-consuming and Murray, while managing the change process from a Board perspective, did not lose sight of the Board’s other governance obligations and carefully managed the rest of the Board’s agenda.
Murray’s efforts and those of the Board, were rewarded with strong shareholder support for the changes, with over 80% voting in support of the share simplification proposal.
As indicated by Simpson Grierson, Murray’s approach was always underpinned by what the decisions would mean for LIC’s co-operative members, both individually and as a whole, to deliver better value on farm to New Zealand’s dairy farmers while balancing the interests of both classes of shares.