Thursday 20 September 2018

Richard Curran: Ryanair takes backward step with AGM media ban

Ryanair CEO Michael O’Leary at last year’s AGM in Dublin.
Ryanair CEO Michael O’Leary at last year’s AGM in Dublin.
Richard Curran

Richard Curran

Ryanair's decision to ban journalists from attending its annual general meeting (AGM) next week is a surprising and backward step.

Journalists don't like the idea of being denied access anywhere. In a journo's perfect world we would all be sitting around the Government Cabinet table taking notes as key political decisions are made.

It wouldn't work very well when it comes to running the country any better - or would it? Perhaps that is a debate for another day.

Publicly-listed companies are not legally obliged to allow the media to sit in at their annual general meeting, but, at least in this part of the world, it is the norm with very rare exceptions.

After all, if anyone is entitled to buy a share in the company, then anyone should be entitled to know what gets said at its AGM.

That has tended to be the thinking around letting journalists cover these events, even in circumstances where a company is in particularly challenging times.

Preventing journalists can become self-defeating on a number of levels. Firstly, all the journalist has to do is buy a couple of shares or arrange with a shareholder to be their proxy or representative and they can attend anyway. This is a minor inconvenience that irritates the media and doesn't help future relations.

Secondly, enforcing the rule on the day can be difficult. For a large meeting like this, it means having a lot of checks and staff on hand which can set an unpleasant and heavy-handed tone

Thirdly, it can make a company look fearful of the impact of what is going to be said by somebody at the meeting. Whenever it came to media criticism or challenges to Ryanair from critics in any quarter, the airline was never fearful of robustly defending its ground in public.

I remember watching a British television journalist seek to doorstep Michael O'Leary with questions as part of a TV documentary a few years ago. Instead of just walking on, Mr O'Leary stopped and on the spot rebutted every question put to him by the programme-maker, in a very emphatic and convincing manner. To the average viewer, the Ryanair CEO won the argument.

But a lot has changed at Ryanair in the last 12 months. Its decision to recognise trade unions has brought a whole new set of obvious challenges. It has been dogged by one-day strikes and industrial relations negotiations.

And there is a lot more to come as passengers face more disruption after unions representing cabin crew in five different countries across Europe demanded contracts based on local rather than Irish law.

Ryanair's first annual general meeting since engaging with trade unions brings with it the very real possibility that the meeting will be a noisy raucous affair, as union representatives seek to get their point across.

Some shareholders might not be too happy either. Ryanair shares are down 26pc in the last 12 months. Throw into the mix, the call by one corporate governance proxy firm, that Ryanair chairman of 20 years, David Bonderman, should not continue because he has been in situ too long.

Yet, none of this explains why the airline would chose to not admit journalists to cover the event or decide not to hold a press conference or briefing afterwards.

Shareholders have backed Mr Bonderman for the last 20 years because the company has continued to deliver for them. Despite its recent falls, its share price is at similar levels to where it was two years ago and is up more than 100pc in the last five years.

Some aspects of ideal corporate governance practice are often overlooked by investors when they have done well out of how a company is run.

Yes, there will probably be a bun fight at the AGM with various groups articulating their views about the company's industrial relations practices, remuneration and corporate governance.

Preventing journalists from covering the event won't change that, and what gets said will probably be reported anyway.

Ryanair has said that it wants to allow shareholders to "discuss all matters freely with the board without these discussions being distorted for PR purposes".

In its defence, this may not be a Trump-like swipe at the "fake news" of traditional media, but it may raise valid points about who represents "media" these days anyway. Bloggers with axes to grind, websites with links to stakeholders of various kinds, may all call themselves "media" in today's communications landscape without disclosing their biases.

How can a company decide which publications are "real media" and which are not? Who is allowed in and who is not? Therefore, it is easier to just say journalists cannot attend.

On the day, journalists might simply walk in, but TV cameras will not.

But this isn't workable either. Publicly traded companies are privately owned but there is a greater onus on them to deliver openness and disclosure which can backfire if a firm retreats simply to what is permissible under the letter of the law rather than what is publicly expected of it. There are a few precedents where publicly listed companies have decided to prevent journalists from attending an AGM in Ireland.

I covered one such meeting in Belfast in the mid-1990s. The company was a listed property vehicle called Ewart PLC. It was in the middle of a major boardroom power struggle as solicitor and property investor Noel Smyth sought to gain control.

Without any advance notice we were told at the door of the event, we would not be allowed in. I rang the Irish Stock Exchange immediately and was told the company had the right to do that.

Noel Smyth rather apologetically explained afterwards that it wasn't his idea to ban journalists but others on the board had made the decision.

Funny enough a boardroom power struggle was behind another example. Ten years ago the London AIM-listed payments group Payzone barred reporters from an extraordinary general meeting in Dublin.

Shareholders were due to vote on ousting then chief executive John Nagle and chief financial officer John Williamson.

Ryanair has been planning this move for at least six weeks. The annual general meeting is being held at 9am in Co Meath and the AGM notice drafted on August 1 states that somebody must be a shareholder or representative of a shareholder to attend the meeting.

One wonders whether the decision on banning journalists was taken by management or the board and was it unanimous? Several of its board members sit on other public limited company boards. How comfortable are they with this decision?

Similar moves in the past have been indicative of internal power struggles around the board table. Could the same be happening at Ryanair?

Whatever the reasons behind this decision, it represents a shift in tone at the company which I believe is regressive rather than progressive.

CEO Michael O'Leary signed a five-year contract which ends in September 2019. With just 12 months left to run on that contract, one would expect an announcement in the coming months about whether he is or isn't staying on in the job.

Forget the AGM, oh to be a fly on the wall for a board meeting!

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