NZME owns the NZ Herald, NewstalkZB, BusinessDesk and OneRoof; insets: NZME chair Barbara Chapman and shareholder Jim Grenon.
An influential NZME shareholder has confirmed his support for Auckland businessman Jim Grenon to take a seat on the media company board but says Grenon’s attempt to seek majority board control with a 9.97% shareholding is an “overreach”.
Australian-based shareholder and media analyst Roger Colman says Grenon’s attempts to have three of his other board nominees elected “must be tempered for the good of the company and allow time for shareholders and the company to see how Jim performs as a board member”.
Grenon, with a 9.97% shareholding, would have 80% majority control on a five-director board if he and his three nominees are voted on under his original proposal. Colman described this as an “overreach”.
Under a new proposal floated by Grenon yesterday to lift the overall number of board members to as many as eight, the Auckland businessman would still have a majority control with his casting vote as would-be chair.
Colman, in a notice to NZME shareholders released to media on Thursday afternoon, said Grenon had been “instrumental in forcing a reconstruction of the board so as to undertake a top-to-bottom examination of group operations”.
He said Grenon had his support. However, he did not support at this time Grenon’s three other nominees to become directors - private equity businessman Des Gittings, lawyer and blogger Philip Crump and retail executive Simon West - because of a lack of a “historical media record”.
The editorial experience needed for an “all-encompassing penetration” of news and other content into the New Zealand population was not reflected in the skill set of those competing for a board position, Colman said.
“None of the new members proposed has any historical media record to competently carry this out. As has the existing board. None have ever been publishers. Therefore, none of the other members of Jim’s proposed board gets my immediate support.”
He said he spent two hours with Grenon and his three other proposed directors last week.
As reported then, Colman has been charting a careful course, wanting to ensure NZME – the owner of the NZ Herald, Newstalk ZB and property portal OneRoof – is not damaged ahead of, or after, a future-defining vote on April 29, which may see a clean-out of the existing five-member board.
Colman holds just under 3% of NZME through leveraged equities and his super fund. Another almost 10% of shares are held by friends and former clients who are likely to follow his lead.
Colman reiterated his previous public comments that he supported Barbara Chapman staying on as NZME chair for a period and for chief executive Michael Boggs to join the board.
But Colman said he was not aware of any skill base or relevant expertise in media, entertainment, radio, publishing or classifieds for Gittings, the managing director of private equity company Caniwi Capital Partners.
For West, “there is no record publicly of any media, or media creation skills. His historic skill base does not overlap with NZME requirements”.
Colman said Crump, who was the founding editor of the ZB Plus brand, had his respect and he wanted to see him become a member of an editorial board, which Grenon has referred to previously.
In an emailed response on Thursday to questions about Roger Colman’s comments, Jim Grenon told the NZ Herald: “Roger is trying to be constructive. I appreciate his input and have come to some compromises based on his suggestions.
“But, at the same time, he is not the final arbiter of the quality of the candidates I have put up. He had one meeting with them and I disagree with his assessment, obviously.
“Also, he seems to ignore the shares I have backing me, yet counts the shares in his much less committed sphere of influence when he suggests how many votes he might be able to influence. Of shares actually owned, I have well over three times what he does, as I understand the numbers.
“I will not be following all Roger’s suggestions, but will have something in it that I hope he can find palatable.”
Grenon said, in a second letter to NZME which the media company released to the NZX on Wednesday, he was willing to compromise on a new-look NZME board by including Boggs as a potential new director but said the existing board would hopefully and quickly decide it is “futile to continue”.
Grenon believed, given the indicated support for his proposal so far and his analysis of voting at last year’s shareholders’ meeting, he would earn “overwhelming majority” support for his proposal.
Previously, he has said he had 37% support, a number he subsequently said increased with additional support from various shareholders to about 47% .
“It should be noted that discussions with these shareholders are ongoing, and some of them have backpedalled somewhat, so I do not know where this will end up,” Grenon said in his new letter.
“However, I continue to engage in discussions with these shareholders, receiving valued perspective on the make-up of the new board.”
Grenon said that while his position was different to his original proposal, “I will in all cases still be elected the chairperson, and me and JTG’s three initial nominees will be at least half the directors and I will also have the casting vote, if it is an evenly divided board.
“I don’t expect the board will end up with eight members, but, if it does, it will likely be only in the short term.”
Colman said Philip Crump should be on a new editorial board. He “would be fundamental to establishing editorial excellence”.
“I would recommend that NZME establish an editorial council, and that Phil be appointed to that board. NZME should exceed the c245,000 copies per day (cpd) circulation that [former NZ Herald owner] Michael Horton did in 1996 versus the c91,000 print and 151,000 digital subscriptions totalling c240,000 cpd 28 years later.
“The NZ population grew 42% between these two dates. If he succeeds, he deserves all the accolades at the next AGM. I would vote for him then [to be a director].”
Colman said Grenon’s interest in editorial management should be directed via the editorial council, led by a senior media and editorial specialist “so that any personal ideology does not drive editorial management”.
“This will help ensure the editorial approach is appropriately managed and includes the right levels of independence, quality, balance and revenue generation.”
Colman said NZME was emerging “as nearly the only private sector near-monopoly media business in NZ”.
“This comes with a probably higher profitability, but social licence. Shareholders deserve the opportunity to see if this is a construct that Jim understands and can adhere to. Especially with the potential acquisition of Stuff, now stymied by this board competition.”
Colman said the existing five directors and four new contenders had failed to install or consider for the board “the skillset for the most important future profit engine, classifieds”.
“Getting OneRoof clear ahead of Trade Me Property is still to be achieved. To competently launch an attack on the even more profitable Trade Me motoring vertical is yet to be matched by the skills of any of the board contenders and members.”
To that end, he supported Nigel Jeffries, the former head of Trade Me Property and now a One Roof advisory board member, to become a new director.
“Especially as NZME is considering a move into motors. Nigel is the most senior such person in NZ not already employed/director of ... Trade Me. He is already on the OneRoof subsidiary board. Nigel is more important to NZME than Des Gittings and Simon West.”
Colman reiterated his previous support for Boggs to join the board.
“Does the board deliberate on agenda items without him being in the room? If he is not, that’s completely unacceptable for the board to discuss virtually any company topic competently.
“In my 51-year experience in Australasian media, he is one of the top operators of publishing CEOs in Australasia. NZME performance disclosures ranks well ahead of any Australian-listed media company. I talk from experience.”
Colman also wanted Sussan Turner and Guy Horrocks to be retained as directors.
“Sussan Turner with her record as board member of TVNZ ... which NZME is about to compete directly with [via] NZME’s video news channel, is indispensable. She was CEO of MediaWorks TV and radio and has invaluable experience and energy.”
Colman also supported another substantial shareholder, Osmium Partners and its nominee, John Lewis, for a directorship “on the basis that he is on the board to recognise his group’s 6.6% shareholding, as much as I recognise Jim’s shareholding”.
Colman’s recommended new-look board was, he said, in order of importance: Michael Boggs, Nigel Jeffries/Guy Horrocks, Sussan Turner, Barbara Chapman (chair for a period), Jim Grenon and John Lewis.
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.
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