Friday 20 September 2019

INM boardroom battle comes to an end as chief executive Pitt resigns from company

Robert Pitt passes pictured at the Independent News & Media AGM in the Westbury in August. Photo: Frank McGrath
Robert Pitt passes pictured at the Independent News & Media AGM in the Westbury in August. Photo: Frank McGrath
Donal O'Donovan

Donal O'Donovan

Independent News and Media (INM) chief executive Robert Pitt resigned yesterday, ending a high-profile stand off between the CEO and the chairman of the country's leading media business.

In a short statement released to the stock exchange, the company said that Mr Pitt had decided to leave the business, with effect from today, to pursue other interests.

The 46-year-old leaves the company, which publishes titles including the Irish Independent, 'Sunday Independent' and 'Belfast Telegraph', just over three years after being appointed CEO and less than two years after he joined the INM board.

But his departure was probably inevitable following a public showdown in August, when as CEO he failed to support the re-election of INM chairman Leslie Buckley in a show of hands at the company's annual general meeting in Dublin.

All INM directors up for re-election at the meeting, including Mr Buckley, were returned with backing from large majorities of shareholders and their fellow directors. That left the CEO, who was not up for re-election, isolated and in the unique position of serving under a chairman he had publicly refused to support.

The AGM was the public nadir of the relationship between the two that had become increasingly strained over the previous year, following a disagreement over a potential bid for radio station Newstalk.

The dispute is understood to have come down to the price INM might pay for the station - with the CEO supporting a lower valuation than the chairman was prepared to consider.

Complicating matters is the fact Newstalk is owned by INM's biggest shareholder, Denis O'Brien, who is a close and long-time business associate of Mr Buckley.

In fact the Newstalk deal never progressed, but afterwards the CEO complained about the process to INM's senior non-executive director, Jerome Kennedy. He then also made a formal complaint to the Office of the Director of Corporate Enforcement (ODCE) under the Protected Disclosures Act 2014, a law that protects corporate whistleblowers.

The ODCE has yet to report on its examination of the issues, but at INM, the board initially examined the issues itself and then commissioned an independent review by barrister David Barniville which was completed at the end of August without any major recommendations for action.

Meanwhile, the situation between Mr Pitt and Mr Buckley was never really resolved, at least until yesterday's announced departure.

The announcement is understood to have followed lengthy talks between representatives of the two sides.

In its short notice to the stock market last night, INM did not name a replacement for the CEO. However, it is understood that an interim appointment will be made within days.

The impasse at the top of the business took place against an already difficult background for media companies, and had hampered the company's own ability to react strategically to the changing market.

An acquisition programme centred on INM's €85m financial war-chest was put on hold as a result of the board-level split, the company told shareholders over the summer.

Piled on those difficulties was a shock profits warning in July, citing a litany of "challenges" which together were noted as having a material impact on the company bottom line.

While factors that were already known, such as falling circulation and advertising, were to the fore in the warning, it also reported that unexpectedly high libel payouts in a number of recent cases had hit profitability and had prompted managers to re-provision against any further losses.

Costs stemming from the fallout at board level were also large enough to be cited in the trading update, understood to have included the costs of INM's independent review and of ongoing engagement with the ODCE.

Together those bills are understood to run into seven figures.

INM itself remains profitable, however, and its titles are market leaders across online and print at national and regional levels.

Irish Independent

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