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• Appropriate Corporate Form
• Non-Trading Boards’ Corporate Form
• Options for Non-Trading Boards’ Corporate Form
• MEAT QUOTA
• CONCLUSIONS

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CORPORATE FORM

Appropriate Corporate Form

67. Where possible, organisational form should fit the functions of that organisation.

68. Government involvement in the organisation’s decision making should be kept to a minimum to promote innovation, flexibility and to achieve clear lines of accountability between producers and the organisations that represent their interests.

Non-Trading Boards’ Corporate Form

69. The Boards are established under their own individual legislation. This makes the Government a party to the Boards’ constitutional form and party to any changes to that form.

70. Further, the Boards currently undertake a number of different functions, pursuing a range of objectives. The functions include:

· commercial activities;

· non-commercial activities where the ‘free-rider’ problem prevents market provision of an activity and

· regulatory activities.

Options for Non-Trading Boards’ Corporate Form

71. It has been recommended to the Boards that they reconstitute under available generic legislation, ie, as companies, incorporated societies etc. Ideally the choice of form should be decided by members, with dissenting members having appropriate rights of exit (withdrawing their share of the net assets ).

72. Any change of corporate form for the Board requires legislation, which makes the Government a player in any reconstitution. The Government should therefore apply sound public policy criteria (objectives) against any option proposed, including:

· transparent process with provision for effective input from producers to decide on the corporate form;

· promoting individual choice;

· ensuring exit rights for dissenting members at fair value;

· minimising Government involvement; and

· ensuring form is the most appropriate for meeting the objectives of the organisation.

73. The form finally adopted by each Board should:

· allow the organisations to respond to changes in their industry without the need to seek government support; and

· provide for clear lines of accountability between the organisation and levy payers.

MEAT QUOTA

74. An issue specific to the Meat Board is its administration of meat quota. The Meat Board currently administers New Zealand’s country-specific tariff quotas for meat, the largest of which is our sheep meat quota for export to the European Union. Any legislative changes to the Meat Board would need to be developed and undertaken in a way that ensures continued acceptability of New Zealand’s quota administration.

CONCLUSIONS

75. There is likely to be an ongoing service provision role for collective organisations in the meat, wool, pork and game sectors. The non-trading boards, however, currently operate in an environment that shelters them from normal commercial pressures, allowing them to potentially crowd out alternative service providers and set levies and make expenditure decisions with little effective accountability to levy payers. Moreover, the Boards’ current special statutory form makes it difficult for them to respond quickly and effectively to the opportunities and challenges facing their industries.

76. Options to promote the Boards’ ability to work more effectively in the interests of the industries need to be developed. These should focus on maximising the value from levy-payers’ resources and address issues relating to:

· accountability to levy-payers;

· organisational governance;

· organisational role; and

· the Boards’ reserves.

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