A high-profile and highly respected Danish businesswoman who served on the board of Oslo-based international fertilizer producer Yara alleges she was asked not to stand for reelection, after she complained of an ‘unhealthy culture’ within Yara’s board and management. Lone Fønss Schrøder told newspaper Dagens Næringsliv (DN) this week that she wasn’t surprised when Yara was hit with the biggest corruption fine in Norwegian history earlier this year, because she sensed something was wrong in the large company, in which the Norwegian government holds a major stake.
Schrøder sat on the Yara board from the time the company was first stock-listed in 2004 until 2009. Schrøder currently runs her own consulting company, and has previously held top management positions at such Scandinavian companies such as AP Møller-Mærsk and Wallenius Line. She is a board member of several Danish and international companies, including Norway’s Aker Solutions and Volvo in Sweden.
DN reported that Schrøder wrote an email to Norwegian Trade Minister Monica Mæland in January this year, shortly after Yara accepted an historic NOK 295 million (USD 48.3 million) fine for bribery. Four former executives were indicted for serious corruption, and will go on trial next year. “My impression of Yara was that the culture on the board and between the board and management was not healthy, there was a lack of transparency and decided opposition against transparency and dialogue,” Schrøder wrote.
She wrote that management was “very patronizing,” and her complaints were dismissed. “I took the situation up in a conversation with the nomination committee, but was asked not to seek reelection to the board,” Schrøder wrote. “There was no professional board evaluation.” She told DN she never received an explanation as to why the nomination committee didn’t want her to stand for reelection.
Schrøder told DN she was not surprised to hear of the corruption case, because she sensed something was wrong within the company. “My impression was that I was regarded as difficult on the board when I asked my questions,” she said. “But I am grateful that I was difficult. I was right. I am firm in my belief that you should trust your intuition. A strong board and a strong board culture are needed to take hold of such things. Yara didn’t have that.”
Poor corporate governance
In her email to Mæland, Schrøder also criticized Yara’s corporate governance model and claimed there was a lack of measures to make sure the board worked effectively and independently. She told DN that she was glad the state ministry in charge of business and trade, which also oversees the state’s stockholdings in several leading Norwegian companies, was now paying more attention to corporate governance and how boards function.
Norway is in the midst of its traditional Easter holiday week, and DN reported that Mæland was not available to comment on Schrøder’s email. Mæland has earlier earlier expressed deep concern over the corruption scandal at Yara and has summoned both Yara’s chief executive, Jørgen Ole Haslestad, and its chairman, Bernt Reitan, in for meetings, after the company accepted its huge fine for corruption. Reitan resigned as Yara’s chairman on Monday, in the wake of the corruption scandal and criticism from another of Yara’s major shareholders, the Norwegian local governments’ pension fund KLP (Kommunal Landspensjonskasse).
Refusal and denial
The leader of Yara’s board nomination committee since 2008, Eva Lystad, refused to comment on Schrøder’s criticism and her account of her departure from Yara’s board. Øivind Lund, the chairman of the board during Schrøder’s time as a member, challenged Schrøder’s evaluation of Yara’s board and management culture.
“The board has conducted yearly evaluations of its own work where everyone has had the opportunity to speak their mind,” Lund told DN. “If a board evaluation doesn’t contain things that can be improved, it’s not a real evaluation. It is clear things emerge that could have been done better, and that’s what we did.” He said he wasn’t aware of any “unhealthy” culture like Schrøder described.
Criticism of both Yara administrations
Schrøder told DN that her description of the alleged resistance towards transparency and dialogue and her criticism of Yara’s corporate governance applied to both the administrations of former Yara CEO Thorleif Enger, who has personally been indicted for corruption, and Haslestad, who succeeded Enger after having been a member of Yara’s board.
Schrøder’s strong criticism of Yara’s board and management emerged just after news broke of the Yara board’s shake-up this week, when Yara confirmed that neither Reitan nor two other members would be up for re-election. Longtime DNB executive director Leif Teksum will take over as chairman of the Yara board later this year.
newsinenglish.no/Emily Woodgate
