A BIZARRE incident involving Australian Wool Innovation (AWI) Chair Wal Merriman covertly observing a grower focus group meeting on sheep genetics from behind a one way mirror has ignited calls for an overhaul of the researcher’s governance practices.
Mr Merriman is understood to have committed the unusual act in June at a meeting in Sydney where the invited Merino producers didn’t want the long-serving Chair to attend.
Reports say the group controlling the focus session and consultation process Axiom Research admitted to the participating growers that Mr Merriman had observed the session from behind the one-way mirror - despite participants being reassured and believing their feedback was to be confidential - along with AWI genetics program manager Neil Judd.
The meeting involved Merino breeders throughout Australia who have since expressed disappointment at the lack of transparency from AWI and the Chairman, while questioning general governance practices.
The issue adds further weight to recent escalating political pressure on AWI and Mr Merriman’s leadership following questioning at Senate estimates about “generous” severance payouts to employees as part of a recent restructure process.
It’s understood Mr Merriman currently has the AWI board’s support and is considered a legendary industry figure in the view of many growers, for his lengthy service.
But a view is also held that his reputation and AWI’s credibility could be salvaged, and address lost trust with grower levy-payers, by apologising for the incident.
Asked if Mr Merriman should resign over the incident, WoolProducers Australia senior vice president and NSW wool grower Ed Storey said it wasn’t for his group to say what should happen.
But he said the entire AWI board needed to self-reflect on the incident.
“Under various governance requirements including the Corporations Act, all AWI directors have certain legal and fiduciary duties that must be upheld,” he said.
“If these requirements are breached then individual directors and the board as a whole are completed to act in the best interests of AWI and its levy-payers.
“This is an organisation spending a compulsory levy – levy-payers can’t sell their shares and choose not to pay.
“AWI in their AGM papers say they aspire to best practice governance – but this incident falls a long way short of that.”
Mr Storey was also unsure if Mr Merriman should apologise to the growers at the meeting or levy-payers in general, to make amends.
“The incident has happened – what’s an apology now? It’d be pretty hollow,” he said.
“The Chairman made a decision to stay behind the mirror – that was his choice.”
But in failing to apologise for his actions, Mr Merriman has stanchly defended his role.
In reports on the controversy, on SheepCentral, which broke the offbeat story, he said it wasn’t his choice to observe the meeting from behind the one way mirror and it was a “bloody system” that he stressed would not happen again at AWI.
But he also said it was the Chair’s role and prerogative to attend any meeting they wanted.
In a statement to Fairfax Agricultural Media, AWI said as a member of the AWI board’s Science and Welfare sub-committee, Mr Merriman often attends company arranged meetings as an observer, and “this is not an unusual occurrence”.
“The Science and Welfare sub-committee was established to provide guidance and recommendations to the board of AWI and the CEO regarding the scientific and research policies and on the conduct of programs relating to activities undertaken by AWI that utilise science or impact animal welfare activities,” it said.
“AWI was aware of Mr Merriman’s presence at this meeting, as were the facilitators.
“That it was conducted with some people in the room and some behind glass observing is not a normal occurrence and a practise AWI will not be undertaking again.”
One of the growers at the meeting - Andrew Bouffler from Trigger Vale Poll Merinos in NSW – told ABC Rural it wasn’t disclosed that Mr Merriman was observing the meeting, leading up to or during it.
“About two thirds of the way through the meeting someone asked for water, and water just materialised and someone jokingly said 'Oh, we must be sitting in front of a one-way mirror',” he said.
“The facilitators then declared that it was a one-way mirror but they didn't say that there was anyone from AWI behind it, let alone the chairman.
"I was certainly surprised, the kneejerk reaction is — why weren't we told?
“It just seemed like the due process for someone in that position wasn't followed.”
Charles “Chick” Olsson who resigned from the AWI board in 2011 said Mr Merriman’s behaviour in regards to the one way mirror incident was now a matter for Senate Estimates to scrutinise.
AWI is likely to appear before the Senate Rural and Regional Affairs and Transport Legislation Committee, chaired by former policeman and Queensland Nationals Senator Barry O’Sullivan, at the next budget estimates session in late October, in Canberra.
Senator O’Sullivan has been contacted for comment.
Mr Olsson said any criticism over the one-way mirror incident had to be aimed at the AWI board and what it intended to do now, to restore faith in the use of levy-funds.
“Conflicts of interest has plagued AWI for many years, indeed I was originally accused of conflicts with my invention of Trisolfen and overturning the mulesing deadline,” he said.
“I certainly think as far as Wal Merriman goes, this is a matter for Senate Estimates.”
Mr Olsson said the AWI board needed to assess the facts of the issue and take action, if an apology was warranted, to growers.
He also said Mr Merriman, as the Chair, had a right to be in the meeting but had shown poor judgement in taking advice to observe the meeting from behind the one-way mirror.
“He should have been more circumspect, certainly, but we shouldn’t crucify the man for one mistake and we need to know all the facts,” he said.
“The board should have a good chat about it – they have all the facts – and tell us what’s going on, if we trust them.
“If he’s made a mistake they should take action and realise it’s a sensitive issue.”
Wool Producers Australia CEO Jo Hall told ABC Rural the incident raised a number of “significant questions” regarding the conduct, ethics and governance of the wool industry’s R&D corporation and should prompt a review.
"We certainly don't believe that it's appropriate conduct for any chairman of a board to be watching a confidential focus group unannounced,” she said.
“It's unethical by any standards.
“We've been long advocating the need for an arm's-length industry oversight of AWI in the interest of all wool growers.
“There's been a number of issues around AWI's performance and one recent one this year has been the staff redundancies that were just exposed in the senate estimates in February.
"They were far above the legal requirements for a redundancy and at the end of the day this is wool growers' money we're talking about.”
Mr Olsson said the big issue for AWI was the “complete lack of oversight” by wool bodies such as the Australian Wool Growers Association and WoolProducers.
“We have raised this issue on two occasions now with Agriculture and Water Resources Minister Barnaby Joyce’s office, but his advisors have simply ignored this lack of oversight of levy and public funds.
“AWI is a complete maverick body, with no oversight at all, pretty much run by a few on the board.
“The other board members are just happy to go with the flow and avoid managing these issues.
“It’s probably time for a full Senate inquiry into AWI, as has happened before.”
But NSW Liberal Democratic Senator David Leyonhjelm who led an inquiry into the use of grower levies and democratic accountability of the R&D and marketing system that matches grower contributions with federal government funds, defended Mr Merriman’s actions.
Senator Leyonhjelm said “If you’re paying for research it’s a good idea to hear it first-hand”.
“Anonymity doesn’t usually apply with focus groups anyway,” he said.
However, AWI 2013 board candidate and board member of giant WA grains co-operative CBH John Hassell said the incident highlighted the need for reforms at AWI.
In a submission to the Senate inquiry into farm levies, that has since led to data bases being established to improve transparency for the various RDCs and levy-payers of various commodities, Mr Hassell said AWI’s governance structure needed to change.
He said the wool body needed a structure where there was one vote per member and zones where the number of members and wool produced had “some kind of balance so that directors can be held accountable to the members”.
“When this occurs, the directors who don't perform or who chase self-interest over the collective good will be weeded-out and directors who perform will be elected and re-elected - if the members chose to hold them to account,” he said.
“And I believe they will and would have in this case if the voting system reflected democracy.
“This is the only taxing organisation that gets votes based on how much tax one pays rather than one vote per member. After all this is not an investor owned firm but a R&D organisation.”
At Senate estimates in March, AWI CEO Stuart McCullough said before he and Chairman Merriman “took over, we had a $2 billion industry and now we have a $3 billion industry”.
The story One way mirror incident triggers calls for AWI Chair self-reflection first appeared on Farm Online.