Media Insider: Jim Grenon relinquished majority control of NZME board in latest proposal to help find a compromise - why directors say they still have concerns
Is there still hope the NZME board and Jim Grenon can come to a compromise ahead of the company’s annual shareholders’ meeting in June? Grenon’s latest proposal relinquishes majority board control - as he releases his full new letter, NZME’s chair responds on what she says are the company’s concerns.
The Auckland businessman wanting an overhaul of NZME’s board says his latest plan was drawn up in the hope of a compromise with existing directors and to prevent the company from having to go through a drawn-out fight and more instability.
But Jim Grenon, who owns 9.97% of NZME, says it’s clear to him the NZME board “have no interest in that” and further believes it had an “attack lined up” on fellow NZME shareholder Troy Bowker, who has been proposed by Grenon as an alternate board director.
Grenon’s latest proposal for the composition of the media company’s board was revealed in an NZME letter to the NZX on Monday.
It is significant in the sense of the numbers - the proposed board of seven would comprise three members of Grenon’s group, rather than four. In two earlier proposals, Grenon and his team held a majority position.
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“My appointees would have been in the minority on that board,” Grenon told the Herald, referring to the third proposal.
Grenon says the proposal was “to try to give the board something to work with, if they were legitimately interested in compromise to save the company having to go through a longer fight”.
Auckland businessman Jim Grenon, as depicted by NZ Herald artist Paul Slater.
In a response to questions from the Herald, NZME board chair Barbara Chapman said the board was “open to further engagement with Mr Grenon and we have communicated this to him accordingly”.
“We note that, under Mr Grenon’s latest proposal, any directors would need to pre-agree certain matters, including acknowledging editorial policy as the responsibility of the NZME board,” said Chapman.
“We have clearly outlined our concerns regarding the risks of Mr Grenon gaining editorial control, of having no alternative plan, of minority shareholder control of the boardroom and poor governance.
“These concerns remain.”
As well as the new proposal for the board composition, Grenon said a small editorial board, chaired by Philip Crump, would be established.
“They will also be responsible for raising standards, including a bit of a brain trust to raise the level of insight. They would report to the NZME board.”
NZME owns the NZ Herald and a suite of regional news brands, Newstalk ZB, BusinessDesk, property portal OneRoof and entertainment radio stations such as The Hits, ZM, Hauraki, Gold, Flava and Coast.
‘Uncertainty’
In its NZX notice on Monday, NZME says it received on Sunday a third proposed board structure from Grenon, “giving uncertainty to shareholders“.
NZME said it had concerns around all of Grenon’s proposals including independence, experience, continuity and gender diversity.
It said it was delaying its annual shareholders’ meeting, from April 29 to June 3, and reopening nominations for directorships.
Grenon told the Herald his latest proposal “did not in any way justify them needing to extend the meeting date, so I don’t know why they would suggest otherwise. Why not just own their decision for delaying instead of spinning it?”
Under Grenon’s third proposal, the board would comprise him as chair, two of his nominees, Crumpand Des Gittings (with Bowker appointed as Gittings’ alternate director), as well as chief executive Michael Boggs, digital classifieds expert Nigel Jeffries, existing board member Guy Horrocks, and one of the other existing board members, chosen from Sussan Turner, Carol Campbell and Chapman.
Grenon said Jeffries was already on the company’s OneRoof advisory board, “well known to NZME and also close to [shareholder] Roger Colman”.
“The idea was that no one could say he was on my team and therefore prepared to follow my bidding, as opposed to living up to their fiduciary duty.”
NZME chair Barbara Chapman.
The full letter
Grenon released the full letter to the Herald that he sent to the NZME board on Sunday. It is republished below, in full. Earlier this week, the Herald republished NZME’s letter and its shareholder presentation in full here, and over the past two weeks we have published Grenon’s two earlier letters in full, here and here.
Grenon reiterates his confidence that he has more than 50% of voting support for change.
He told NZME in his latest letter that it was preferable to seek “overwhelming support”, hence why he was putting forward new ideas for the board composition “which may appeal or at least provide some more latitude about what might be acceptable to a larger group, including me and the shareholders supporting me”.
“This also depends on members of the current board, and Michael Boggs, being able to put any hard feelings on this behind them, which is totally out of our control.
“If they can’t then I expect we can come up with other mutually acceptable names or alter numbers. The tentative names may want to sit down to make sure there is not going to be a problem with chemistry.”
Grenon also proposed the OneRoof advisory board be made more active and formalised, with Jeffries, Horrocks and Simon West as board members.
The overall, new and reconstituted NZME board would pre-agree certain broad themes, he said, including “improved disclosure”.
Editorial policy would be “acknowledged as the responsibility of the NZME board, including processes to ensure compliance”.
“And there will be a thorough cost review, with me being very involved at an operational level. Simon will assist me on a time intensive basis of perhaps 20 hours per week. Of course, Michael will be very involved in this as well.”
Grenon: ‘Attack lined up’
Caniwi Capital executive chairman Troy Bowker.
In her letter on Monday, Chapman highlighted a text that Bowker had sent in 2023 as an example for an argument that “some supporters of Mr Grenon are motivated by supporting certain political perspectives”.
Bowker has rejected that assertion, saying the text, which was republished in a recent BusinessDesk article, has been taken out of context and he is a champion of free speech.
Bowker, who has previously publicly criticised Chapman over what he believes to be a lack of shareholder engagement, said he was astounded by the personal attack on him. He said he had never met or spoken to Chapman.
Chapman herself has disputed the assertion that she has not engaged fully with shareholders; she and the board have defended their stewardship of NZME, highlighting its performance against other publicly listed media companies in Australasia.
Grenon told the Herald: “With regard to Troy, he has always been disclosed as behind the shareholding that Des represented. I think they already planned to attack him and had the attack lined up.
“It doesn’t look like something that would have so quickly popped up and been incorporated after the Sunday afternoon board meeting for release in a large document on Monday if it wasn’t in the cue already.
“So him being proposed as a potential alternate director, for when Des couldn’t attend, is a red herring to me, which they have chosen to try to get their supporters emotionally indignant about.
“They could have just said ‘no’.”
The BusinessDesk text
Meanwhile, BusinessDesk has updated its earlier article to place more context around the 2023 text.
The original text, to BusinessDesk co-founder Pattrick Smellie, stated: “With subscription services that claim to be a business news site, I don’t want to read any stories that piss me off”.
An editor’s footnote to the article states: “This column was published on March 6. On April 2, Troy Bowker contacted the author to insist his comment related only to paywalled business news websites, and not all news media. Mr Bowker had sent an email on March 6 to an incorrect email address and this was received on April 3.”
Bowker says that text message was taken out of context and was part of a long back and forward around the publication of a piece of social commentary on the website.
He says there is no contradiction between his position on that matter and his championing of free speech. The BusinessDesk article, he says, would have been fine on the Herald.
“BusinessDesk is very clearly a niche subscriber-only publication selling its subscribers ‘business’ content. That’s what subscribers think they are paying for when they subscribe ... there is no contradiction whatsoever with this view and me being in favour of more diverse opinions and free speech in the Herald. The Herald is quite obviously a different publication with a much broader audience than BusinessDesk.”
Bowker said, as an NZME shareholder, he had extensive engagement with NZME chief executive Michael Boggs on a number of topics.
“He also explicitly sought my advice on how to create and monetise content with the ZB-Plus initiative.
“This is at odds with Ms Chapman’s claim – in fact her CEO was actively seeking advice from me – a person Ms Chapman is claiming to be not interested in different perspectives in the media.
“Ms Chapman needs to stop attacking her own shareholders and allow the proper process to take place; which is shareholders voting for the board nominees. Why is she delaying the vote and engaging in personal attacks on shareholders?”
NZME has been given the opportunity this week to respond to Bowker’s assertion that he had been personally attacked without any checks on the accuracy or context of the text message; it has yet to respond to that specific query.
In March, Chapman told the Heraldit was not a time for radical disruption. “It is a defining moment for NZME, its future and for New Zealand. We need to ensure - going forward - NZME’s independence, its stability and its ability to pursue growth.”
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.
