Will Fairfax Media independent directors regret their entering the chairmanship debate in the past week or so?
Twice now in the past 10 days they have entered the debate over the chairmanship in a way that opens them to being questioned about their independence.
They have twice supported the chairman, Ron Walker. The first time it was against criticism from the Fairfax family, which is the largest holder of Fairfax shares.
(Not that they should buckle when a big shareholders says something, but not intervening, or doing it circumspectly might have allowed for a cleaner quicker resolution of the dispute, instead what we have seen so far.)
Now, yesterday, it was their expression of regret after Mr Walker confirmed that he won’t seek re-election at the company’s AGM .
"The Independent Directors of Fairfax Media Limited ("The Independent Directors") note with deep regret the statement issued today by Chairman Ronald Walker in relation to his decision not to seek re-election at the forthcoming Annual General Meeting.
"The Independent Directors wish to express their thanks to Mr Walker for his stewardship of the Board and many achievements on behalf of Fairfax Media Limited shareholders during very challenging times for all media companies.
"Mr Walker has led the Board with great integrity and strength, and has upheld the highest standards of corporate governance at all times.
"The Independent Directors wish to express their gratitude to Mr Walker for characteristically placing the best interests of all shareholders ahead of his own personal interests in this matter.
"The circumstances and some of the developments of the past weeks are deeply regrettable, however it is to be hoped that his decision to not seek re-election will allow the company to rule a line under these events and move forward."
Mr Walker’s decision was telegraphed late last week to the Australian Financial Review. His announcement yesterday wasn’t ‘new’ news in many respects.
The directors did not need to make a statement yesterday in the tone they did.
The company has to be united at the top to meet the challenges that confronts it, not split.
That will only make relations with the Fairfax family and other big shareholders a bit more difficult to repair after the AGM.
Mr Walker said he won’t seek re-election at the annual shareholders’ meeting to help the Fairfax’s directors and management to focus on their jobs rather than be “mired in disputes and controversy”.
"In view of the unfortunate developments of the previous few weeks I have come to the view that in the best interests of our 52,000 shareholders and 10,000 employees I should not seek re-election.
"This will enable a smooth transition to a new Chairman, and for the process of Board renewal we have already commenced to be continued.
"In addition it will enable our Board and management to continue to focus on the tasks ahead of our great company rather than being mired in disputes and controversy with one single shareholder," Mr Walker said in his statement.
Fairfax, which posted a record loss in the June 30 year, fell 2.5 cents to $1.66 yesterday,
Walker took over as chairman in August 2005, after having served on the company’s board for two years.
Since then, he has overseen the company’s acquisition of John B. Fairfax’s Rural Press Ltd. in 2007 for $2.7 billion.
Last month, the company scrapped its dividend and posted its largest loss since the company was listed on Australian Stock Exchange in 1992.
Deputy chairman, Roger Corbett is likely to become chairman. He is visiting big institutional shareholders in Sydney this week to discuss their attitude to him and the company.
And the ANZ Bank yesterday popped up with a bit of "poaching” that showed a good eye for banking talent.
The bank yesterday named former very senior Westpac executive, Phil Chronican, as head of its Australian operations, reporting to group chief executive Mike Smith.
Mr Chronican will be responsible for the bank’s local retail, commercial and wealth management businesses and also act as head of ANZ’s retail businesses worldwide.
Effectively the makes him a very senior executive and the most important line banker in the operations side of the ANZ.
He will oversee the integration of Friday’s ING deal.
He replaces Graham Hodges who has been acting in the role since May, and will join the Melbourne-based bank in November.
Mr Hodges will continue in his permanent role as ANZ’s deputy chief executive.
Until July this year, Mr Chronican was at Westpac Banking Corp where he was group executive of its institutional bank business.
From 2001 to 2005 he was Westpac’s Chief Financial Officer to CEO, David Morgan.
"He’s one of Australia’s most respected bankers and his experience makes him ideally suited to continuing the growth of the Australian business and to making a significant contribution to our super regional strategy,’ Mr Smith said in a statement.
In yesterday’s weak market, ANZ shares had a good day, up more than 50 cents to $24.33, a rise of around 2.3%.
That’s more a reflection of positive broker comments about the ING purchase and not Mr Chronican’s recruitment.
