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Brian McCarthy departs Fairfax Media

Fairfax Media boss Brian McCarthy has resigned, with board member Greg Hywood appointed acting CEO, the company has announced to the ASX.

His sudden departure comes less than a fortnight after investors were told of a new structure for the company.

In a statement to the Australian Stock Exchange, chairman Roger Corbett said: “The board initiated discussions with Brian about the commitment and energy required to drive the performance of the business over the next three to five years and most importantly the implementation of the recently announced business strategic plan. Brian did not believe he could make the commitment for the next three to five years.”

The company said “a global executive search” will follow for its next CEO.

According to the Sydney Morning Herald, McCarthy left Fairfax’s Sydney headquarters this afternoon.  

The publishing company, which includes newspapers The Sydney Morning Herald and The Age, was already in a state of flux, with the decision to bring its mastheads’ print and digital editions back together under an as yet unknown boss. It is also being restructured into nine new business units:

  • Metropolitan Media, which will include both print and online editions of the Sydney Morning Herald and The Age within the same unit. It will also include a national sales team
  • Australian Regional Publishing
  • Financial Review Group
  • Fairfax Radio Network
  • New Zealand Media
  • Agricultural Publishing
  • Printing
  • Digital Transactions
  • Trade Me

A key unanswered question was – and remains – the position of Fairfax Digital boss Jack Matthews.

At the time of last month’s shakeup, McCarthy appeared in a staff video talking about the future:

Fairfax_mccarthy_departure_chartThe market did not react particularly favourably to last month’s restructure, with shares hitting a low point of $1.34. They have since recovered slightly to $1.44, although that immediately dropped to just above $1.40 on news of McCarthy’s departure.

Hywood’s interim appointment will inevitably raise questiosn about whether he is a candidate for the permanent postion. He comes from an editorial background and has been in senior roles at the Australian Financial Review, Sydney Morning Herald and The Age. He joined the Fairfax Media board three months ago.

He was ousted from the company in 2003 during the Fred Hilmer’s tenure. Hilmer was CEO from 1998-2005. He was succeeded – after a lengthy search – by David Kirk, who was in the chair until departing two years ago yesterday. This Friday would have been the two year anniversary of McCarthy’s promotion.

McCarthy had previously led Rural Press, which merged with Fairfax in 2006.

In the ASX statement, McCarthy said: “I was committed to leading the development of the new strategic plan and, having completed that, discussed with the board whether I could deliver at the capacity needed in the coming years.”

This morning, The Australian reported that an influential group of “concerned citizens” had prepared a document called The Age: A Litany of Decline ahead of a public vote of no confidence in the management.

The Fairfax statement:

SYDNEY, 6 December, 2010: Mr Roger Corbett, the Chairman of Fairfax Media Limited [ASX: FXJ] today announced Brian McCarthy had resigned as Chief Executive Officer and Managing Director and Mr Greg Hywood, currently a nonexecutive director, had assumed the role of acting Chief Executive while a global executive search is conducted.

Roger Corbett thanked Brian McCarthy for his significant contribution and said “the board initiated discussions with Brian about the commitment and energy required to drive the performance of the business over the next 3-5 years and most importantly the implementation of the recently announced strategic plan. Brian did not believe he could make a commitment for the next 3-5 years. We agreed that now, at the beginning of the implementation of the plan, it was the appropriate time for the leadership change.

“The board would like to acknowledge the leadership role Brian played steering the company through the Global Financial Crisis, his success in driving cultural change and his stewardship of the development of the strategic plan, a plan endorsed and supported by the board. Brian has set the company up for a very successful future and we thank him for his contribution.”

Brian McCarthy said “I have been with Rural Press and then FXJ for 34 years. I have thoroughly enjoyed it. I was committed to leading the development of the new strategic plan and, having completed that, discussed with the board whether I could deliver at the capacity needed in the coming years. Quite simply I decided I could not commit to the time required by the board. FXJ is one of Australia’s greatest media companies and will be into the future. I will take a break and I look forward to pursuing new business opportunities in the future. I wish all employees and the business well deserved success and thank all employees for their great support over the decades.”

Roger Corbett said “On behalf of the board we would like to thank Greg Hywood for agreeing to be the acting CEO of the business. One of Fairfax’s respected former executives, Greg brings to the board, and now this role, deep editorial and commercial experience. We are in a fortunate position to have someone of his calibre acting in this role.

“A Walkley Award winning journalist, Greg has held a number of senior management positions at Fairfax including Publisher and Editor in Chief of each of The Australian Financial Review, The Sydney Morning Herald/Sun Herald and The Age. He also held the position of Group Publisher Fairfax magazines.

Mr McCarthy’s exit arrangements are in keeping with the terms of his contract.

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