Elders is hurting right now, as are its shareholders.

With the share price at a historical low yesterday, it seems that news of a replacement chairman has failed to inspire investors.

John Ballard, an experienced director who has seen it all, is a welcome addition to the embattled board. He is often touted as a turnaround specialist, having been chairman of perennial underperformer Wattyl and CEO of Southcorp. In many ways, these companies had parallels with Elders, but Ballard is no miracle worker. In this case he will struggle to right the ship.

The appointment of Ballard may have been overshadowed by another downgrade at Nufarm, which does not bode well. Elders is a company under siege. Operationally, this conglomerate has an overly diverse gaggle of struggling business arms. More than one is sick, but it is the rural services division that has forced CEO Malcolm Jackman to assume direct control.

This direct intervention may be unavoidable, but the risk is that other sections of the business will lose their way.

Agricultural managed investment schemes are dying a painful death, with the demise of major players Great Southern and Timbercorp last year. The remainders, Elders and Willmott Forests (currently suspended by the exchange), look particularly unwell and in need of attention.

Sure, the entire industry in which Elders operates is difficult, with various external factors facing farmers, but Elders' response has confused the market. On the one hand, it is committed to reduce its cost base. This is admirable when faced with the relentless margin-sapping that comes with competing with generic foreign suppliers. However, cost savings have been hard to come by, with reducing staff numbers a focus via the euphemistic "tougher consequence management".

The other aspect of the turnaround strategy is improved, personalised service, which appeals to farmers and builds loyalty.

An overarching problem facing Elders is the lack of shareholder trust and support. Its capital raising last year blew up any remaining loyalty. Outlandish forecasts of a hockey-stick-style recovery in the fortunes of Elders, while capital was being raised were followed by downgrade after downgrade.

Quite rightly, the Australian Securities & Investments Commission has launched a probe into how Elders' forecasts could be so wrong and at least one law firm is firming up a class action against the company.

While Ballard is wrestling with Elders in order to get it pointing in the right direction, shareholders are wondering how long it will be before they are called on again to inject yet more capital.

Given the abysmal outcome for shareholders who participated in the most recent capital raising, combined with the company's well-documented difficulties with its borrowing facilities, one wonders who it may turn to if it ever has a need for a little more cash.

This article by Stuart Wilson, Chief Executive Officer of the Australian Shareholders' Association featured in his weekly Shareholder Opinion column in The Australian on Wednesday 21 July 2010.