Tuesday 21 January 2020

Dearbhail McDonald: Big question for INM after unprecedented abstention by CEO is what happens next?

INM chairman Leslie Buckley, centre, at yesterday’s AGM. Photo: Frank McGrath
INM chairman Leslie Buckley, centre, at yesterday’s AGM. Photo: Frank McGrath

Dearbhail McDonald Group Business Editor

'It's like Christmas for business journalists," enthused a colleague from a rival newspaper moments before Independent News & Media's highly-anticipated AGM kicked off yesterday.

But although it was standing room only at Dublin's Westbury Hotel - and the board of directors were packed together at the top table tighter than a box of festive crackers - the meeting failed to live up to the fireworks many had expected.

INM chairman Leslie Buckley pictured with Michael Doorley, Company Secretary, after the Independent News & Media AGM in the Westbury hotel. Photo: Frank McGrath
INM chairman Leslie Buckley pictured with Michael Doorley, Company Secretary, after the Independent News & Media AGM in the Westbury hotel. Photo: Frank McGrath

For months, Ireland's largest media group has been making the headlines for many reasons, primarily relating to a pensions row and a major dispute between INM's chief executive Robert Pitt and its chairman Leslie Buckley, a long-term associate of businessman Denis O'Brien, who owns 29.88pc of INM.

A dispute over the price to be paid by INM if it acquired radio station Newstalk - wholly owned by Mr O'Brien's Communicorp Group - led to Mr Pitt making a protected disclosure late last year to the Office of the Director of Corporate Enforcement, Ireland's company law enforcement watchdog.

The ODCE has yet to complete its investigation.

Like all employees who make such a disclosure, Mr Pitt is wholly protected by the 2014 whistle-blowing legislation as that investigation - and INM's latest boardroom saga - runs its sorry course.

Robert Pitt, CEO Independent News and Media, abstains from voting for the re election of IN&M chairman Leslie Buckley during the Independent News & Media AGM in the Westbury hotel. Photo: Frank McGrath
Robert Pitt, CEO Independent News and Media, abstains from voting for the re election of IN&M chairman Leslie Buckley during the Independent News & Media AGM in the Westbury hotel. Photo: Frank McGrath

An independent review into the matter was also commissioned by INM's board.

That review, completed by senior counsel David Barniville, is now being considered by the board.

And depending on which leaked version of the independent review you may have read in recent days, Mr Barniville has either cleared Mr Buckley ('The Sunday Times') or has landed more squarely in Mr Pitt's corner by making no definitive finding on the central issues ('The Irish Times').

Yesterday Mr Buckley, who opened the AGM with a tribute to James Osborne, the former INM chairman, lawyer and corporate titan who died suddenly last week, said that various leaks about division at board level were "very unfortunate".

But regardless of such leaks, there's no doubt whatsoever that the chasm between chair and chief executive is so much more real than had been perceived in the weeks and days leading up to yesterday's meeting. This much was borne out by Mr Pitt's decision, as a shareholder, to abstain from voting in favour of Mr Buckley's re-election as chair.

Again, this prospect was well flagged. But it was extraordinary all the same to see the CEO of an Irish PLC engage in a de facto vote against his chairman.

It certainly seemed a very lonely place to be in for Mr Pitt, who oversaw the growth of INM's cash-in-the-bank to almost €96m amid hellish trading conditions for the media sector.

With the anger over INM's handling of payments into its two defined benefit pension schemes recently defused, the task of providing nervous mirth fell, as it often does, to its longstanding individual shareholders, one of whom implored Mr Buckley to seek more "happiness," possibly with the appointment of a clown to INM's board.

"I'm not miserable," quipped Mr Buckley who ran the AGM with the seamless skill of a chirpy if steely ringmaster.

For his part, Mr Pitt maintained a stoic and dignified visage in the face of his abstention - an unprecedented act in modern Irish corporate history.

For all the drama or lack of it, yesterday's AGM, which closed with a round of polite applause from shareholders - the vast bulk of votes were cast by proxy - did little to address the chasm between Pitt and Buckley. Nor did the AGM address the impact the CEO/chair impasse is having on INM's ability to devise and execute a strategy, including much-needed acquisitions and a return to days when shareholders can reap a dividend.

The challenges facing the media, including INM, are acute. But no amount of hand-wringing could conceal the fact that its bank balance is healthy and in dire need of strategic decision-making to protect shareholder value.

So everything and nothing changed at yesterday's AGM.

The big question is: what happens next?

Indo Business

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