Wednesday 12 December 2018

Doorly to usher in new era at INM as Pitt exits

Staff welcome move to pass ceo mantle to veteran

Michael Doorly has been appointed new interim chief executive of INM after the departure of Robert Pitt
Michael Doorly has been appointed new interim chief executive of INM after the departure of Robert Pitt

Samantha McCaughren and Gavin McLoughlin

It has taken almost a year, but last week the deadlock was broken in one of the most high-profile corporate rows in recent memory.

The falling-out between Robert Pitt, chief executive of Independent News & Media (INM), and its chairman, Leslie Buckley, came to an abrupt end on Thursday. A short and curt statement announced that Pitt would leave the company with effect from the following day.

Over the last fortnight, both sides had been locked in intense talks, with legal teams for both sides latterly ensconced in the Law Library, focused on a mediation process which finally delivered a conclusion to the deep-seated row.

By Friday evening a new interim chief executive - company secretary Michael Doorly - was put in place, with expectations that he will join the board at its meeting on Wednesday.

The hope among shareholders and INM employees is that an end to this impasse - which was played out in plain sight at the company's agm last August - will mark a new era for the company which has a sizeable war chest, with cash on its balance sheet of over €85m.

"It's great to have someone who has an inherent understanding of publishing at the top," said one insider.

"INM must now use this opportunity to strike forward and make up for lost time. The company is uniquely positioned to grow in the digital space. Michael Doorly understands that and will be strategic in his outlook," the insider said.

"Over the last few years team members heard a lot about experiences in retail and that was really interesting. Michael Doorly will probably focus on publishing, whether it's in print or online."

Stakeholders felt that the row between the ceo and chairman, which dragged in the Office of the Director of Corporate Enforcement (ODCE) and a host of lawyers, paralysed the company at one of the most high-stakes periods in media history.

This was effectively confirmed in a statement from INM in July which stated that "while certain matters pertaining to the Independent Review and the ODCE are ongoing, strategic M&A activity is curtailed, and the group is instead concentrating on new initiatives which add to its existing lines of business".

The language from Buckley in Friday's stock market announcement was very much focused on the opportunities that lie ahead, with the chairman stating that he is "very much" looking forward to working with Doorly in driving the business forward.

Doorly, a qualified chartered accountant, is also taking a long-term view, commenting on Friday that he looked forward to "planning for the long-term future of the business, including diversification and the transition to a sustainable digital strategy, and to continuing to work with the exceptional team that we have at INM". Employees and senior editorial staff warmly welcomed his appointment, emphasising that his understanding of INM, where he has worked for over 20 years, and the wider media industry will be a huge asset.

A popular figure across all levels of INM, he spoke directly to a number of staff on the editorial floor last Friday evening, a gesture greatly welcomed by editors and other journalists.

The seeds were sown for last week's dramatic changing of the guard last November. Following media reports, the company confirmed to the market that "an issue" had arisen between Pitt and Buckley over a potential acquisition. What might have been a run-of-the-mill boardroom spat, would force a permanent wedge between the two men once made public.

The target was not named on the stock exchange announcement but it was widely known that the asset at the centre of the clash was radio station Newstalk - owned by Denis O'Brien, a close business associate of Buckley and the largest shareholder in INM, publisher of the Sunday Independent and other titles.

The dispute was understood to have come down to the price INM might pay for the station - with the ceo's advisers supporting a lower price than Buckley's. Pitt brought the matter to the attention of INM's (now former) senior independent director Jerome Kennedy, and a board sub-committee was established to look into the matter. The board - with the agreed absence of Pitt and Buckley - had unanimously adopted the sub-committee's report that no issue of concern arose.

But that was far from the end of the matter. Pitt took his complaint further, making a protected disclosure to Ireland's company law watchdog, the ODCE. INM established its own "formal independent review", carried out by a senior counsel and a governance expert.

As the row dragged on, it began to hurt the company. In half-year results published in July, the company said: "Profitability has been directly impacted by costs associated with the independent review and meeting the requirements of the Office of the Director of Corporate Enforcement." Legal costs for the row exceeded €1m by this point and continued to rack up.

Despite the tensions making their way into the public domain, no resolution proved forthcoming - and Pitt and Buckley remained in situ all the way to the INM agm in August.

The circular disseminated prior to the meeting had indicated that Pitt "reserved his position" is relation to Buckley's re-election to INM's board. Sure enough, when the meeting took place in front of a packed room in Dublin's Westbury Hotel, Pitt did not raise his hand when Buckley's re-election to the board was put to the meeting.

It was the most dramatic moment yet and is believed to have been the first time in Irish corporate history that the ceo of a plc did not support his chairman in a public vote.

If anyone thought that Pitt and Buckley's working relationship might be able to function despite their differences, there was no coming back from the agm. An exit package was agreed last week. Although INM has reportedly set aside €2m for departures of senior management this year, Pitt is believed to have received just a portion of that sum.

And so it now falls to veteran Doorly to bring INM into a new era of growth at a time of unprecedented change in the media, bringing with it great challenges and great opportunity.

Sunday Indo Business

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