AUSTRALIAN Wool Innovation may not rush to appoint a new director following the shock resignation last week of English processor, Laurence Modiano.
While a decision on the vacancy left by Mr Modiano will be put to the board at its next meeting, chairman Wal Merriman will argue the seven remaining members are enough for the time being.
But not filling the position may exacerbate board divisions made more obvious with Mr Modiano's departure and exposed in an open letter he wrote to all woolgrowers last week.
In his letter, Mr Modiano attacked the chairman, the company's marketing expertise, and bemoaned criticism of himself and fellow directors Meredith Shiel and Chick Olsson, particularly over the Italian letter affair earlier this year and ongoing accusations of a "conflict of interest" on the board.
In February Dr Shiel, Mr Olsson and Mr Modiano were part of an AWI delegation which visited Italian processors, some of whom subsequently wrote to AWI attacking Dr Shiel and Mr Olsson for a conflict of interest believed to be because they were promoting the use of mulesing pain relief treatment, Tri-Solfen.
That letter was publicly leaked and exposed significant board disunity, just days before Brenda McGahan quit her post as chief executive.
"The conflict of interest accusation, which has for so long hounded Mr Olsson and Dr Sheil is outrageous and unfair - at no time did I ever witness them abuse their position for personal gain," Mr Modiano said in his letter last week.
"Leaks continue to flow from within the company. AWI's integrity and ability to press on with urgent change is being seriously compromised.
"For AWI's sake, the perpetrator(s) of this abuse of trust must be uncovered and expelled.
"AWI does need to be more transparent about and better communicate the decisions it makes. But while those decisions are being debated, directors should be free to state their opinions amongst themselves without fear of exposure and ridicule."
Mr Modiano revealed that in recent weeks he had called for a no-confidence vote in the chairman, which was later dropped when Mr Merriman declared full confidence in all members of the board.
Four days later Mr Modiano said he was then called on to resign.
Insiders have told Rural Press Mr Modiano had threatened to quit his directorship for some time, adding there had always been difficulties with the fact Mr Modiano was not based in Australia.
Mr Merriman was not willing to respond to specific allegations made in the letter, except to say Mr Modiano's decision to resign was his own.
"A lot of the things he's talking in his letter about have already been decided by the board," Mr Merriman said.
"The strategic plan had input from all the board, and was signed off by the board, locking the company in for the next three and five years has been done and he's had input into all of that.
"The board signed off on that and Mr Modiano was part of that process."
Mr Merriman said there was not necessarily any need to have a new director, with board numbers back to seven where they were under former chairman, Ian McLachlan, before he increased the size of the board.
"That will be a board decision, but we're back to where we were."
Mr Merriman would not entertain suggestions board division were now at unworkable levels.
"Board stability is up to each individual board member," he said.
"But I don't think AWI is different to any other board, it's full of passionate people and without these passionate people nothing would have been done at AWI and the organisation would have been broke by 2011."
Mr Merriman said $25 million has been saved from a $70 million spend, which has been achieved by the current board in the past 18 months.
The saving, he said, was a result of paring back salaries and making tough decisions on existing projects "to find the money to eventually go".
"We're at the stage where we've leveraged $120 million with other partners to go marketing in the next three years."
The Federal Government will soon make a decision on the statutory funding agreement for the next three years, which is tipped to stipulate a skills-based board be appointed and may also give the Minister for Agriculture new powers to intervene in matters deemed too agri-political.
Mr Merriman said in its funding proposal to the government, the AWI board believed it had complied with everything the Government wanted.
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