Ten board questioned over independent directors as it restates need for media reform
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.
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
You missed the three most outstanding moments of the farce that was the Ten Network AGM.
1. When Chairman Gordon explained that Illyria (and it’s associated trusts etc) owned and controlled by Lachlan Murdoch, is in no way related to Foxtel, nor NewsCorp of which Lachlan Murdoch is Co-Chairman and his family is the controlling shareholder, and this is also despite NewsCorp itself submitting it’s own substantial shareholder notice for Foxtel’s new Ten stake.
2. Director Siobhan McKenna claiming she wasn’t a representative of Illyria but represented all shareholders. Previously she’s said to have been nominated by Illyria and later James Packer but again, none of them are related parties. McKenna is also employed by Lachlan Murdoch as his right hand at Illyria.
3. Former Biliionare (let’s update the title to reflect the current value of WIN shall we) Bruce Gordon given the floor for an ‘I love youse all’ ramble, proving [Edited under Mumbrella’s content moderation policy] and is now sucking up desperately trying to retain some sort of value in WIN. Should have been outside rattling a tin ‘Please buy my valueless regional network’.
Some of the shareholder heckles deserve honourable mentions too. However, the biggest laugh and ongoing joke is Ten hit the skids once Lachlan Murdoch appeared yet the board has never accepted responsibility for giving him carte blanche over the operation. The board has been either spineless or will accomplices, corporate governance with a full twist in the pike position.
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Lachlan drove the share price down so it was (on the whole) a cheaper buy for the companies his family control. Smart strategy.
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Interesting how media companies fall under the influence of merchant bankers. Gordon, Gonski, Burrows to mention a few. And how often the cards seem to fall just right for packer and Murdoch no matter how much they cock things up.
Lesson: never hold shares in a company with either investment bankers or media moguls on the board.
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