The agribusiness giant Saskatchewan Wheat Pool's (SWP) board of directors is asking its delegates to consider changes that would move control of certain elements of its corporate governance out of provincial legislation and into SWP's Bylaws.

Currently, provisions for the election of directors and restrictions on Class B ownership are included in The SWP Act, 1995. The board has formally recommended that delegates petition the provincial government to move these provisions into the Bylaws. In order to proceed with the petition, two-thirds of delegates must approve both of the recommendations, and a further two-thirds of Class B shareholders must approve moving the provision respecting ownership restrictions.

SWP president and chairman Marvin Wiens said the proposed changes would give the company greater flexibility since it would no longer have to go through the typical, year-long process of petitioning the legislature to make governance changes.

"The board is committed to changes that enhance SWP's present and long-term business and financial status," Wiens noted. "Given the extent of the challenges in prairie agriculture over the past few years, and the need to adapt to an environment that promises even more change ahead, we recognize that it is in the best long-term interest of the SWP."

CEO Mayo Schmidt added: "As I've stated consistently since my arrival, our priority is to pursue relationships and alliances that maximize long-term value for all shareholders. The legislative amendment we are proposing would simply allow us to move more quickly if an opportunity arose."

As well, Schmidt said, by moving the process for electing directors into the Bylaws, the company can more quickly implement recommendations that would strengthen the independence of the board and ensure the inclusion of directors with specialised skills identified by the TSX in its proposed corporate governance guidelines.

The announcement is a further initiative in a comprehensive turnaround strategy that started soon after Schmidt was appointed CEO in January 2000.  He said efforts to enhance productivity, lower costs and reduce debt have resulted in numerous achievements, including:

*SWP moved 92% of shipments in 50- to 100-car trains during the first three quarters of fiscal 2002, outpacing its nearest competitor.
*Transportation incentives helped SWP win more than one-third of Canadian Wheat Board tenders even though Saskatchewan was hardest hit by the drought.
*Western Canadian market share reached 23% in the first nine months of FY 2002, up 9% from a year ago.
*Costs in core operations have been reduced by more than C$30m year-to-date. In the past 24 months, SWP has reduced its cost base by more than C$55m.
*The divestiture program is virtually complete, generating more than C$200m in proceeds and restoring focus to core grain handling and marketing and agri-products businesses.
*Year-to-date, SWP has reduced term debt by C$175m, including a C$25m advance payment on its November 2002 installment.
*The development of Farm Credit Canada and John Deere Credit programmes have cut costs for producers while reducing the need for securitization financing by up to C$200m.
*Cost effective grain insurance coverage has been put into place to help stabilise earnings.

Schmidt said these and similar achievements have improved the company's overall risk profile and improved its marketing model. However, he acknowledged that the prolonged drought and its effect on SWP's financial performance have overshadowed the total effect of the improvements and cautioned that the drought will impact SWP's performance in the coming fiscal year.

"We all know that volumes drive profitability and the sustained dry conditions on the Prairies will, without question, reduce industry volumes. Early estimates suggest a production decline of 33% throughout western Canada based on the five-year average which will negatively impact our bottom line in FY 2003," he said.

In spite of this, Schmidt expressed confidence that the SWP has the staying power to weather the coming fiscal year. He said the company is already developing a revised three-year plan that considers current conditions, the SWP's financing requirements and its plans to improve its long-term prospects.

"Because of our past actions and solid planning, we enjoy very good relationships with our lenders," he said. "We have met our financial obligations on or ahead of schedule and we look forward to working with our lenders over the coming months to discuss our longer term needs."

The SWP's year-end results will be reported the week of 21 October and the AGM for Class B shareholders will take place on 19 December 2002.