Scientists & Engineers on Company Boards

By Michael Edmonds 11/08/2013

As Fonterra continues to deal with the fall out from the botulinum contamination scare, it has been suggested that New Zealand companies such as Fonterra might benefit from having scientists or engineers on their Boards of Directors.

In an interview on The Nation this weekend Professor Jacqueline Rowarth, Professor of Agribusiness at the University of Waikato, spoke about Fonterra’s recent challenges, and how scientific representation on their Board might have been an advantage – having someone who could quickly understand and explain the difference between bacteria, spores and toxins, for example.

Over the past 5 years, Fonterra have faced a number of science related challenges – the melamine scare, detection of DCD in milk powder and now the botulium spore incident. In the wake of these issues perhaps a little science & engineering at the top, to complement the business and industry knowledge of Boards might be more appealing in the future?

Note – At the time of writing this Professor Rowarth’s interview is not available on line, but I suspect it will appear here in the next few days.

0 Responses to “Scientists & Engineers on Company Boards”

  • HI Michael, There was also a very good letter to the editor of the Press saying exactly the same thing, from a prof of plant science at Lincoln. Sorry I don’t have it to hand.

  • “New Zealand companies such as Fonterra might benefit from having scientists or engineers on their Boards of Directors”

    It’d be interesting to learn what a typical board in New Zealand is composed of (by professional training/expertise).

    Independent advisors might serve a useful role in this mix, too – ?

  • Apparently a Lincoln M.Agr.Sc. graduate ( female and Massey professor ) isn’t a scientist, and can’t communicate to fellow board members.

    It’s arrogant to assume that adding a scientist or engineer to a board will enhance it, especially as shareholders elect who they want. Boards feed on what their management team provides, which is unlikely to include specific release testing of products.
    Corporate governance is about company and shareholders.

    The current issues with Fonterra are operational issues ( inadequate research and quality assurance ) that are the domain of the management team, not the board. The board appoints the CEO, and should be held responsible if that person is inadequate in actions, communication, and/or corporate management.

    The regulators should also be in the picture, especially when products ship to countries that expect national regulators to enforce quality standards. She’ll be right has dug, and continues to excavate, this hole in NZ’z image, not a lack of scientists and engineers in corporate governance.

  • Bruce,
    Good point about Nicola Shadbolt, a M.Agr.Sc already being on the board. One would think that her interests in farm and agribusiness strategic management, business and risk analysis and primary industry investment would serve the board well.

    It is just as arrogant to assume that having scientific/engineering knowledge on a board wont enhance it.

    You point out that issues with Fonterra are operational issues including inadequate research. I would have hoped that having a scientist/engineer on the board that they would be able to point out that inadequate research is a problem.

  • I’m not sure why having a scientist or engineer on the board would help identify inadequate market research ( selling products to countries expecting effective national regulatory overview and quality assurance monitoring of corporates ). As I noted, that’s an operational issue, and more likely to be understood by a commerce or law graduate.

    I assume Fonterra will review commissioning that had ineffective CIP and quality assurance product specifications that released contaminated product to markets.

    I doubt anybody will ask why MPI doesn’t create and enforce performance standards, as it’s pretty obvious they have neither the desire or skills. Just another Pike River regulatory illusion.

    In industries where quality or product safety are critical ( eg aviation, pharmaceuticals ) the corporate structure often has a separate quality assurance communication path to the board that circumvents the CEO – whose role often focusses on production and profitability. They can’t afford to rely on external regulatory overview.

    Larger companies also have the CFO reporting to the board directly – as that information is critical to performance of their duties, including evaluation of the CEO.

  • I’m not aware of any recent data but in the mid-90’s MoRST did a nice piece of work looking at the number of scientists and engineers in Parliament, local government, boards and senior managements.
    Engineers were well-represented at local government level but relatively rare otherwise, and below the levels found overseas.
    Lawyers and accountants were over-represented, a finding which surprised nobody.
    We have probably moved on a lot since then in terms of Board structures, as it has become a more prominent issue.