Dear Woolgrowers,
It is with immense sadness that I have agreed to the chairman's request of May 25th to resign as a director.
He accused me of not being present at board meetings, even though I have always attended them, either in person or by telephone/videoconference.
He also advised me that he objected to my calling for a vote of no-confidence in his chairmanship at the board meeting of 21st May in front of the CEO and legal secretaries. I reminded him that he had recently stated all communication should be shared with them. I had previously requested a directors' only meeting which was rejected by the board.
When he agreed to declare full confidence in all the members of his board I accepted to rescind my motion, for which he thanked me. Four days later, by asking for me to resign, he made it clear he did not believe in his declaration.
These tactics are not worthy of the company and its stakeholders and I will not work under such a chairman.
I feel you should now know the truth about AWI, as perceived by me.
I wish to begin by clarifying certain matters.
The attack on Mr Olsson, Dr Sheil and me in the Italian letter of 24th February was not altogether unexpected. I had long wanted as many directors as possible to listen to the views of our downstream partners on how they feel AWI can improve wool's chances. I knew what these were and had attempted faithfully to convey them at many board meetings. There is also deep-seated anger in the pipeline at the time, money and opportunities wasted by generations of agri-political leaders. The directors who accompanied me knew of this anger and, as they are passionate people of good faith, still agreed to face the music while other directors kept away. 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. The letter which ensued caused considerable damage to their reputations. Half of the signatories were not even present, including Mr Zegna himself, who was with the AWI Chairman on the day of the Biella meeting. Some are still too embarrassed to discuss it with me, others disagreed with much of it but signed it out of deference to Mr Zegna. Some Italians thought it far too personal, pointless even, and refused to sign it. One was not even aware he was a signatory. Mr Zegna's letter is unworthy of the attention it has been accorded.
The Italian letter was by no means the only attack. I have never minded constructive criticism. A healthy industry can only move forward with informed opinion and honest debate. But if we are to create long-lasting benefit it is imperative to retain sincerity and respect, which have been all too often lacking.
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.
I have long argued that the company requires the best creative and marketing talent it can afford. This has to operate and be sourced in the regions of the world which make the biggest difference to wool demand. Unfortunately there is no-one I am aware of at AWI who possesses this talent. I am not saying it does not have good people. Many of its marketing staff are excellent operatives. But the strategic vision or creative aptitude essential to telling our stories is lacking. The team are willing but limited to the scope of what they were hired to do: to provide a service to Woolmark licensees. The licence is trapped in a 1960s time-warp, its iconic logo too, and it will take people of courage, insight and flair to make the difference it so badly needs. Gone is the time when Woolmark could impose its rules on retail. The major brands are too powerful and price-driven to care about our rules. A beautiful woman, with little in her purse, can use lovely clothes, make-up and sweet talk to catch a prince.
I recommended the Keep agency to AWI as a way of taking our message where it would have maximum effect. I wanted to make wool beautiful, relevant and modern to a world which has forgotten to know and therefore to care about it.
There was nothing generic about Keep's strategy and ideas. Wool is an input, not an output. The consumer world needs to know about the intrinsic qualities and advantages of the fibre. And it also needs to know about why each specific product is better because of it. We have to tailor-make our messages according to each region, culture, sex, income, age and interest group. We need to employ experts in each region with the gift to enter the hearts and minds of potential wool lovers. To create in the latter the same passion which exists in us. We cannot do it all at once. We have to start somewhere.
I have been misquoted as stating the Woolmark logo is of little value. What a terrible distortion. The brand is your greatest asset and the clearest way of creating a deep emotional connection. But we do not make the best use of it. At the moment it is an object of beauty that has neither meaning nor relevance when it is gasping for both.
I would also call for a debate on no longer charging for the use of the Woolmark. Licence income is in decline and barely covers overheads, if at all. The emphasis has to be on attracting ever more brands to our calling. We must provide them with exciting ideas and possibilities to help them sell more wool. We should supply the framework but they have to pay for the painting. The only exception where we would pay are those outstanding brands that would position us at the pinnacle of the fashion retail world. The Campaign for Wool is a unique pilot to help us understand what works with brands of differing prestige and product.
I consider the model of leveraging with retailers a waste of your money. When AWI boasts that it has lifted sales at a retailer (level) by 200,000 kgs for the A$400,000 cost of doing so, in my opinion it is a wasteful subsidy. There is no guarantee that sales will improve once AWI funds cease. Work with third parties by all means. Give them ideas, stories, relevance, excitement, creativity. Let us work with retail brands on a Woolmark and wool stories which are adapted to their ethos. Let us use PR, the media, the internet. Throwing money at retail and generic advertising is a perpetuation of decades of squander. We either evolve with the needs of the consumer world or we die.
Many retailers want to source wool from unmulesed sheep. The foolish 2010 deadline and terror of becoming a PETA target has driven a growing number to make unreasonable demands. Assuming there is no technological breakthrough, they have to decide whether to abandon fine wool clothing altogether or allow growers more time. I suspect most will opt for the latter. Demand for NM wool is unlikely to subside but growers have to be allowed to do what they deem best for their sheep. Dialogue with rational animal welfare bodies must continue. PETA cannot be a partner because their ideology is so antithetical to human wants.
In Stuart McCullough I feel AWI has a CEO who is commercially-minded, dedicated to and knowledgeable about our industry. His door is always open. He knows how to communicate, how to get the best out of the people around him, how to trust and delegate to others and , above all, is courageous enough to declare what he does know and humble enough to admit what he does not. The board and I have every confidence in him and he gets my wholehearted support. His main focus must be to invest grower money with the counsel of the best technologists and marketers AWI can find. He must create a team in whom he can trust.
My fellow directors are good and well-intentioned people. If I have one recommendation to make it is the conception of a process which introduces a wider array of skills to the board. I recommend a two tier board system. The democratic process should remain to allow growers to elect a supervisory board of trustees, people of broad experience, good standing and good faith, who must learn from and consult all those whose contacts and experience can serve wool. Their primary duty must be to select a board of directors including, I suggest, a grower, a scientist, an international wool processor, an international marketer and an international retailer. By international I mean individuals who are daily exposed to and resident in the wool-consuming world, who have their finger on the pulse. The supervisory board is ultimately responsible to the growers who elected them but it must also protect the board below from political interference.
For too long woolgrower money has been regarded by too many as a honeypot to be used for their own narrow interests. They crow about the benefits they can bring the industry when the overwhelming majority have done little other than line their pockets without bringing much, if any, value to the long-suffering grower. Beware of individuals who lust after grower money for their own enterprises. If viable, they will manage very well on their own.
I would like to thank you for having given me the very great privilege of having served you. I appreciate hugely the support and confidence you have given me, as well as the opportunity of discovering a beautiful country and a special nation. I have learned and experienced more in 18 months than many do in a lifetime, and for that I will be eternally grateful.
I will continue to support and fight for wool's interests from within my family business. We cannot prosper if you do not. The reverse is also true.
Laurence Modiano
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