Ten board questioned over independent directors as it restates need for media reform

Ten AGM L:R CEO Andersen, chair Gordon, company secretary Stephen Parington

Ten AGM L:R CEO Anderson, chair Gordon, company secretary Stephen Parington

The Ten board, and its chairman David Gordon, have defended its decision to reduce the size of the TV Network’s board and the lack of independent directors at today’s annual general meeting.

The move comes amidst a board shake, with Foxtel CEO Richard Freudenstein joining the new six member Ten board that now includes chair Gordon, Siobhan McKeena nominated by Illyria Lachlan Murdoch’s private investment vehicle, John Klepec mining magnate Gina Rinehart’s representative and independent directors Brian Long and Paul Gleeson.

Questioned by the Australian Shareholders Association about the lack of a majority of independent board members, Gordon acknowledged it was a challenge, given the number of major shareholders on its register, including not only Murdoch and Rinehart, but also the likes of James Packer, Bruce Gordon and now Foxtel.

“Network Ten has a seriously large number of large shareholders,” said Gordon. “The balancing exercise of having a number of independent directors versus having a number of shareholder reps is something the board has been conscious of. In some respects I sometimes wonder if the size of the board is sometimes limited by the size of the dais because of the number of people who sit here today.” 

Gordon went on to argue that six was the right number.

“The reality is we have to balance giving our major shareholders a fair proportion of board seats and at the same time ensuring there is independence on the board but not so large a board for things to become more complex,” he said.

“We have been running a large board for several years now and we have been looking for an opportunity to reduce the size of the board. We have a judgement call to make on the size versus the amount of independence we have come out with the board of six … it is a balance between having the right number of independents and the right number of shareholder reps.”

The Ten board has taken the opportunity of Foxtel’s recent purchase of 15 per cent of the Network to reconfigure the board’s size.

McKenna insisted she was independent despite being nominated by Illyria.

McKenna insisted she was independent despite being nominated by Illyria.

Shareholder activist Stephen Mayne also took aim at the board composition and in particular questioned whether Siobhan McKenna’s role on the board represented a conflict of interest given Lachlan Murdoch’s role as executive of co-chair of News Corp which owns Foxtel.

His statements drew a fierce response from McKenna who said she was independent, after chair Gordon described her as “Illyria’s representative”.

“I don’t actually represent Illyria on the board I am nominated by Illyria but represent all shareholders as all directors do”, said McKenna.

During the AGM, the chair restated Ten’s position urging the government to act on media reform.

“The ownership and control provision in the Broadcasting Services Act are outdated in effect only apply to three types of media platforms: terrestrial TV, terrestrial radio and printed newspapers,” said Gordon.

“We are hopeful that next year will finally see the removal of both the two out of three rule and the 75 per cent reach rule and not a piecemeal tinkering that would only create a new set of distortion and continue to impede our ability to compete.”

The annual general meeting also saw shareholders vote in favour of the consolidation of shares which will see the share price of Ten rise as the number of shares is dramatically reduced.

Ten shares were trading at 15.7 cents as of 1pm today.

Nic Christensen 


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