Michael Pascoe writes:

After watching the Prime Minister cuddle up
to Big Ted, it’s nice to see the Fairfax board getting in the mood of Play School‘s 40th
with a bit of looking through the windows. There’s a spot of bother, though, in
that New Zealander CEO David Kirk obviously wasn’t raised on the ABC
toddler show and doesn’t know there are any windows.

Kirk is quoted in the Smage
as saying Fairfax doesn’t have any formal window in which directors can buy shares. “It is really
about reviewing the situation at any time and the board and the executives
being very clear and getting sign-off from the legal division that this is the
time it is possible to buy shares. That was all done,” says Kirk.

But chairman
Walker has repeatedly seen windows, telling the Oz: “I’ve been wanting to buy more and more shares for months, and that was
the only window of opportunity when I could.” And that’s very similar to the
quote he had previously given the Smage: “Unfortunately, we (directors) could not buy shares
up until last week because the board had too many projects on. There was a
window of opportunity and all directors were able to buy shares.”

One banana’s
window of opportunity is another kiwi fruit’s legal possibility.

For anyone
interested in good governance, there’s an almighty gap between “legally
possible” and best practice. It’s legally possible to kill and maim on occasion
and get away with it, but most folks wouldn’t consider it ideal.

If Fairfax can’t
see that it’s less than good governance to have the chairman trading away in
the period between 30 June and when the company’s results are announced, their
windows are in need of a very good clean indeed.

There is another
issue here in that it really shouldn’t be up to the CEO to defend his
chairman’s share trading. Kirk is Walker’s employee. Anything Kirk says about Walker’s behaviour is
going to be a bit Mandy Rice-Davies (“Well he would, wouldn’t he?”). You may as
well ask Harto over at News Ltd if Rupert Murdoch knows anything about media.

It’s in such
situations involving the chairman that a board can benefit from having a
“senior director” to handle the issue. Perhaps if the Fairfax board started looking through windows
that face forwards instead of backwards…

Peter Fray

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