After a tumultuous week in the political spotlight, Australia's wool industry body could face an investigation by the National Audit Office (ANAO).
Queensland LNP Senator Barry Sullivan is considering referring marketing and research body Australian Wool Innovation (AWI) after a controversial Senate Estimates appearance this week.
The ANAO is able to access information and documents within public sector agencies which may not be available in annual reports.
Senator O'Sullivan is chair of the Rural and Regional Affairs and Transport Committee and needs its backing in order to make the investigation happen.
Ensuring best practice by AWI
The hearing this week saw senators scrutinise the behaviour and corporate governance of AWI's leaders, chairman Wal Merriman and chief executive Stuart McCullough.
Mr McCullough told the committee he could approve projects under $250,000 without needing board approval.
When asked about how the board scrutinised project costs, Mr Merriman said: "I would presume the CEO had done his due diligence. I have every confidence in the CEO."
It was also revealed Mr McCullough earned $423,000 from AWI in the last financial year.
"That's nearly half a million dollars and it's paid for out of wool producers' back pockets," Victorian Nationals Senator Bridget McKenzie said after the hearing.
"I think it is incumbent upon Mr McCullough to deliver on that and ensure the organisation he is leading is best practice.
"What we saw [in Estimates] was the Chair's behaviour, on his own admission, and indeed more broadly [there have been] issues raised about Wool Innovation's best practice when it comes to governance."
Chairman's voting power 'scary'
Along with scrutinising how AWI spends its money, Estimates also revealed the extent of Mr Merriman's power in deciding who sits around the board table.
Mr Merriman controlled more than one fifth of proxy votes at last year's board election.
AWI director Paul Cocking has not been nominated as a preferred candidate for the board but is seeking re-election at next month's annual general meeting.
Mr Cocking said he supported the chairman and CEO but he criticised the voting system.
"I understand the board needs stability and I understand that the chairman needs to have a fair say in who is put up for election and gets selected," he said.
"But I think the sheer number [of votes] is quite scary, the influence it can have.
"And I am not happy that you can see the votes on the way in."
Estimates revealed it was possible to see how early votes were cast ahead of election day.
Mr Cocking said that was inappropriate and the chairman should disclose how proxy votes were cast.
"I think that adds a lot more transparency," he said.
Breaching code of conduct
Mr Merriman this week admitted that he breached AWI's code of conduct when he swore at an ABC journalist in response to questions about why he secretly observed wool growers through a one-way mirror.
Senators O'Sullivan and McKenzie stopped short of demanding a change of leadership at AWI but said it needed to change its ways to win back trust.
Mr O'Sullivan told the ABC he hoped wool lobby groups would merge to create a more powerful lobbying force.
.jpg?w=600)
