30 Oct 2013

Fonterra taking steps to address failings - chair

7:42 am on 30 October 2013

Fonterra's board is setting up a new risk committee and taking steps to shed its fortress image after a critical report on the crisis caused by the botulism scare.

The independent inquiry, commissioned by the board of Fonterra, found a series of weaknesses contributed to a precautionary recall of whey protein concentrate, which was later found to be a false alarm.

They included a lack of senior oversight of crucial decisions, problems with tracing potentially affected products and the belated escalation of the issue.

The inquiry also says Fonterra's crisis management and external communications were inadequate.

Fonterra chairman John Wilson says the board is already taking steps to address the issues, including better crisis management.

Mr Wilson says the board will also tackle its negative "fortress Fonterra" perception.

The inquiry found that many affected by the crisis, including customers whose own reputation was damaged, felt neglected by a company that was focussed on its own immediate interests.

Mr Wilson says Fonterra also plans to bring its communications in-house after criticism about poor relationships with the Government, the media and others affected by the crisis.

Fonterra's progress on the recommendations will be reviewed by the inquiry at intervals of nine and 18 months.