AN explosive leaked email has revealed the extent of looming upheaval and internal disarray at Herefords Australia as Dr Alex Ball warned board directors he was about to quit, while pointing out core concerns underpinning a dysfunctional governance culture and ongoing financial headaches amid $1 million in losses over the past three years.
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Dr Ball joined the national stud and commercial Hereford cattle breeder organisation in July last year after a lengthy, successful career at Meat and Livestock Australia (MLA) working in genetic improvement.
But this week it was revealed the leading red meat scientist had quit his position at the Armidale based office prematurely, with his actual departure set to formally occur on June 30 to mark what will be a tumultuous 12-month term.
In an impassioned but sternly written confidential email to board members and Chair Pat Pearce dated March 22 this year - obtained by Fairfax Agricultural Media - Dr Bell sought to clarify rumours about his future while warning he’d written and signed a resignation letter but hadn’t yet sent it.
“I still hope that I can assist the breed and I am passionate that it is a great breed to assist and take forward,” he said.
“However I can only do this with 100 per cent support from the board.
“So if any of (you) disagree with what I have said and believe that it is time for me to go then it is a simple phone call to the Chair and my resignation will be forwarded immediately.”
Dr Ball’s email outlined his deep concerns about the organisation’s internal affairs including; a budget in net deficit for three years; resistance to adopt recommendations from an external governance review; lack of board support to back-in tough management decisions; and a culture of board members beholden to voters, rather than serving the organisation’s overall best interests.
“There are (rumours) about my resignation,” he wrote.
“I have had a confidential conversation with the Chair and the Treasurer about the following issues.
“In that conversation I indicated that if the situation did not change then I would be compelled to resign.
“Unfortunately that confidentiality has been breached (again a board member) and I am now defending myself with members which is something that I wasn’t prepared for.
“However I thought that I owed you all an explanation of why I am at the stage of resigning and these are the reasons why.”
Dr Ball’s resignation from Herefords Australia follows the sudden departure of two other board members in recent times.
An extraordinary general meeting was also held in December last year to try and overthrow the current board but narrowly failed to succeed, despite that move gaining about 40pc of the vote.
The leaked email also arrives ahead of the national cattle breed organisation’s next annual general meeting that’s set to be held in Armidale in June, with the nominations deadline due to close on May 5.
It’s understood a group of five members will aim to run on a united ticket seeking election, to try and reverse the long-standing culture they believe has been resistant to implementing changes needed to modernise the organisation and topple the board’s current power-base, including Mr Pearce who has been on the board for about 12-years, and Treasurer Kevin Hillsdon.
“It needs a real shake-up,” said one source close to the group but asked not to be named.
“If a board in waiting was ready to go at the extraordinary general meeting last year the take-over vote may have succeeded.
“What’s most frustrating is the Australian cattle sector is facing huge opportunities due to free trade agreements opening big export markets and record high prices and the Hereford breed has a lot going for it but the board has lost the plot.”
A brief statement on the organisation’s website from Mr Pearce said, “It is with regret that I inform you that Dr Alex Ball has tendered his resignation as CEO of Herefords Australia effective the 30th June 2017”.
“Dr Ball will continue to operate as the CEO until that date and has the full support of the board to do so.
“The board of Herefords Australia has commenced a process to identify the management and staffing requirements beyond July 1, 2017 and will inform members in due course of those requirements and what appointments are necessary.”
Mr Pearce- a large southern NSW Hereford and Poll Hereford breeder - told Fairfax Agricultural Media yesterday 12 board members were elected to serve three-year terms and normally four directors would be up for election each year - voted on by the organisation’s 1500 members, comprising commercial and stud breeders – but five positions would face the polls this year.
He expressed disappointment that the email written by Dr Ball in March, ahead of his resignation this week, was leaked to the media and cited the high-level breach of board confidentiality as one of the core issues facing Herefords Australia.
However, he said the organisation was addressing its core issues including financial and governance concerns and was also looking to adopt the recommendations and findings of an external governance review tabled in February this year, conducted by business consultant Philip Pogson.
Mr Pearce declined to comment further regarding the leaked email or any other issues.
Speaking to Fairfax Agricultural Media, Dr Ball said the Hereford breed had “a great future” but a small number of breeders, who held the power and controlled the organisation, were resisting changes to “modernise” operations and the industry, in terms of adopting genomics or breed management plans.
He said he also hoped the recommendations of the Pogson report would be accepted and implemented by members, with any governance changes needing a 75pc vote of members to change the organisation’s constitution.
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Dr Ball’s email in March said when first interviewed for the role, he was informed that HAL (Herefords Australia Ltd) was in a “very sound position with a positive cash flow and the opportunity to implement a number of new initiatives”.
“Whilst I believe that this information was conveyed in good faith, it was and still is not the truth,” he said.
“The truth is that the core business has never been a break even position since the merger.
“Investment and MLA incomes have allowed this fact to be masked and when MLA and investment monies have declined, the business has lost money.”
He said that financial issue should have been addressed over the last 10 years.
“It simply hasn’t and as a result since being employed I have had to cut costs, stop sponsorships, beg, borrow and steal resources and generally be a complete bastard,” he wrote.
“Unfortunately that trend continues and I see that it is only going to continue for at least the next two years.
“It is a simple fact that over 2015-2017 you will lose $1million - having a budget that has a net deficit three years running is something that I cannot as CEO and company secretary continue to support.
“The only way forward is to tell the membership the truth and deal with the issue.
“This means having the strength to adopt a three year business plan where there is some radical changes in fees and services and some really hard decisions.
“Unfortunately I have lost confidence in the board’s ability to do this.”
Dr Ball said the bull levy and the breed percentage debate “shows me that tough decisions are not defended by the board”.
“As a board the dysfunctional nature of relationships and the outside influence of members results in an inertia or reluctance of change,” he said.
“This will be the ultimate death nail of this board.
“I will also add that no strategy can solve the cultural issues that exist within the breed.
“If you believe that decisions can be made that keep all members happy then there are fairies at the bottom of the garden.”
Dr Ball said the other key issue was that HAL the company was still very much under resourced and current staff were “simply being overwhelmed by the magnitude of the issues that have been found”.
“The whole database, registry system, adherence to the rules and regulations, membership etc. has been simply put a debacle and one that the board must and should take responsibility for,” he wrote.
“You cannot have a breed register that does not have 100pc integrity and yet policies and decisions have been made that project the few and disadvantage the many.
“You simply must adopt 100pc sire verification for all registered animals regardless of the cost as this is the core asset that protects the breed, anything less is not acceptable and will place the breed in a very risky position.”
On the Pogson review, Dr Ball said 15 resolutions had been put forward including bringing in board members with expertise.
“Whilst supported, only one board member was prepared to action this point,” he said.
“This leaves the issue of how members will respond when essentially there has been little direct evidence that the board has adopted a culture of change.
“As a result, the next AGM will simply be another blood bath and I for one don’t want to have the same experiences as in Dubbo and in Armidale.
“You have three months to radically change members’ perceptions.”
Dr Ball said “Unfortunately over the nine months there has been several instances where tough decisions or unpopular decisions have been made by myself and others and we required the board to support the decisions”.
“Three examples being the groups insurance (including youth), genetic conditions and the breed percentage demonstrated that some board members were and still are prepared to privately undermine these decisions,” he said.
“The irony is that the hard pragmatic decisions that I made was to protect the company, the board and its members from risk and potential legal ramifications.
“Again being responsible is different to being liked.
“This is again simply a culture that cannot be continued.
“It is very easy to be liked - it is much more difficult to be respected.
“Your obligation is to the company and to protecting the whole membership, not satisfying a few.
“As a result the board is unable to make the hard decisions without compromise and that ultimately will be another death nail.
“Whilst I accept that I haven’t been popular and that is evident in some of the member feedback, I can honestly say that I have been fair and transparent.
“Sometimes the truth is an ugly outcome but it is the only outcome.”