Is there a growth story for Fairfax, and if so, what might it look like?
The rumble I hear around town is that the low standing of Fairfax Media at present is already being reflected in decisions being made behind closed doors by government and other key media decision makers. If there is a growth and a renewal story, it needs to be found soon.
The Australian Council of Super Investors’ report on the contest for the Fairfax Board got a fair bit of airplay last week. A copy of the document has landed in my intray and can be read here. The contenders for the Board include Gerard Noonan, Steve Harris and Stephen Mayne. ACSI rejected the Board’s recommendation of a vote against all three, instead giving qualified support for Harris and Noonan.
Relatively unreported were the results of the ACSI’s interviews with board candidates. Harris told them:
There was a need for Fairfax to create and sell a “growth story” on the company’s future prospects. He would be eager to see the company focus on growth and not become overly concerned with print media competition and cost control.
That will be music to the content makers’ ears. But what is that growth story? The Board’s actions mean we will probably never know what Harris has in mind. As for Noonan, he told ACSI that if elected he would focus on:
… ensuring the Fairfax Media board on his departure would have at least half of its membership “under 40” with significant experience and knowledge of new media.
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Perhaps a woman as well? With Julia King’s retirement, the Board is presently composed entirely of older men.
As reported elsewhere, the ACSI report favors abstention or a vote for Noonan and Harris. It would be “reasonable” to vote for them because of their media experience. Mayne also has media experience, but is not supported because:
… his status as a perennial board candidate and shareholder activist … makes it less likely he would be able to work constructively with the incumbent board.
(Noonan, it should be said, is a director of ACSI, but did not take any part in its assessment of the candidates for the Fairfax Board.)
ACSI says that it normally opposes non-board endorsed candidates because they create the risk of factionalised and dysfunctional boards, but in a tart comment, adds:
In the case of Fairfax Media ACSI notes that the incumbent board has clearly suffered from division and has presided over a decline in returns to shareholders. The commitment of the chairperson elect to board renewal is positive but ACSI notes that this commitment includes the appointment of directors with media experience – and all three non-board endorsed candidates have significant media experience. ACSI notes that the risk of the Fairfax Media board becoming divided as a result of the election of non-board endorsed candidates must be balanced by the recent divisions among the incumbent, board-endorsed, directors.
What might the growth story for Fairfax look like? We are unlikely to find out. The Fairfax board has declared there are only two vacant positions. One of them belongs to the new chairman, Roger Corbett. No candidate can be elected with less than 50%, which means with the Board recommending against, Noonan, Harris and Mayne are faced with mission impossible.
But what happens after the AGM? The Board has made it clear it wants to recruit media experience. Where will it turn? What is the “growth story”?
Declaration: Harris and Noonan are on the Board of the recently established Foundation for Public Interest Journalism, of which I am the Chair.