A proposal to give the Australian Wool Innovation board the right to expel a shareholder has sparked a new row with the peak body, WoolProducers Australia.
The expulsion powers are contained in a package of proposed changes to the AWI constitution whose fate will be decided by a shareholder vote at next week's annual general meeting.
The sweeping Ernst & Young review of AWI's performance and governance had recommended the inclusion of the powers in the AWI constitution to bring it into line with Dairy Australia Ltd.
Jo Hall, chief executive officer of WoolProducers, said she had been trying to find out why the AWI had decided to seek the expulsion powers while ignoring key EY recommendations such as putting a maximum term on a director's tenure.
"That's pretty cute of AWI given there were plenty of other (EY) recommendations such as the tenure recommendation (for maximum 10-year terms) that they haven't bothered to include."
The proposed constitutional changes would give the board or shareholders the right to expel a shareholder "on reasonable grounds".
AWI has told shareholders the issue of director tenure was still in consultation and would be resolved at, or before, next year's AGM.
Ms Hall said she had also been trying to clarify with the Department of Agriculture whether any shareholder expelled from the company would still have to pay the compulsory tax on wool returns.
"You couldn't expect somebody to pay a tax and then not be able to exercise your rights as a shareholder," she said.
Similarly ignored in the proposed constitutional changes had been EY's recommendation for the scrapping of the requirement that people seeking election to the AWI board obtain more than 99 shareholder signatures in support of their nomination.
An explanation in the notice of the AWI annual meeting said broad consultation with woolgrower representative groups had produced a consensus for retaining the current rule to prevent board elections from becoming unnecessarily complex and costly.
The constitutional changes do include a requirement for the AWI chairman to disclose at the start of an annual general meeting the number of proxies she or he is holding and a breakdown of directed and undirected proxy instructions.
Meanwhile, federal Agriculture Minister, Bridget McKenzie, has expressed her doubts about how genuine the AWI board is to making change including cultural change.
In a letter to AWI chairman, Colette Garnsey, the Minister directed the company to provide her with a written update on progress with implementing each of EY's 82 recommendations.
"I also expect AWI to provide me, in response to this letter, with a communications strategy for how it will provide a greater level of transparency and assurance to levy payers about its implementation of the review and its broader operations," Senator McKenzie wrote.
She also asked AWI to provide shareholders with an update on its progress in implementing the review's recommendations at its annual general meeting in Sydney on November 22.
The EY review was highly critical of AWI's lack of collaboration with other research and development corporations and research bodies.
"In an increasingly globally competitive marketplace, it is critical that our rural research and development corporations are focused on delivering benefits to levy payers and enable our industries to jump ahead of our competitors," Senator McKenzie said.
Three vacancies on the AWI board will be filled after the counting of votes at AWI's AGM in Sydney on November 22.
But first shareholders would need to support the resolution to restrict the size of the board to seven directors.
If they don't as many as six new board members could elected as the constitution allows for a maximum board of 10.