NZME’s directors have today come out firing against businessman Jim Grenon’s plan to clean out the company’s board, raising concerns about editorial control and what they call the “significant risk” of a minority shareholder having control of the boardroom. Grenon says the directors have run out
Media Insider: NZME board comes out firing at Jim Grenon over editorial control, governance concerns; delays annual shareholders’ meeting until June
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NZME chair Barbara Chapman. Photo / Ben Dickens
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NZME says it received on Sunday a third proposed board structure from Grenon – causing “uncertainty” for shareholders – and that it had concerns around all of the proposals, including independence, experience, continuity, and gender diversity.
NZME says it has taken external legal advice and “determined that it is appropriate and in the best interests of the company” to delay the shareholders’ meeting until June 3. It had been scheduled for April 29.
NZME has reopened nominations for directors of the company.
An accompanying letter, signed by Chapman on behalf of the board, pulls no punches and further outlines their concerns.
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As the Herald has done with Grenon’s two letters released to the NZX here and here, we publish the full NZME letter below.
“We strongly refute Mr Grenon’s assertions that NZME has not performed well financially in recent years,” Chapman says in the letter.
“The media industry both locally and globally has been in turmoil, facing major disruption from global tech competitors and also a depressed economic backdrop.
“Our local competitors have felt this, and many have been in financial difficulty. Within this context, NZME has been a standout performer.
“On a total shareholder return basis, measured across both the last one and five years, NZME has outperformed every listed competitor in the Australasian market. External analysts have been publicly positive around company performance.”
Grenon is seeking a cleanout of the board of NZME, critical of what he considers a lack of disclosure and below-par operational and financial performance.
He has been approached for comment on NZME’s notice and letter today. BusinessDesk quoted him as saying the directors had run out of ideas: “That’s really the best move they’ve got, isn’t it? They don’t have another better move, as it were.”
In his second letter to NZME shareholders last week, Grenon said he believed he would have “overwhelming majority” support for his planned changes, based on support so far and his analysis of voting at last year’s shareholders meeting.
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“Hopefully, the existing board quickly decides it is futile to continue and ends both the distraction to the company’s affairs and the needless expense.”
Instead, the NZME board has fired back with its own six-page letter today, raising concerns on a number of fronts. It has also released a 15-page presentation, highlighting the company’s performance and the existing board’s concerns with Grenon’s plan.
Editorial control
Chapman said the board acknowledged “the importance of quality journalism”, which was central to NZME’s “long-term sustainability”.
“NZME has a broad audience and to maximise revenue we must produce content which appeals to a diverse range of perspectives. Internally, we call that the ‘Business of Journalism’. There is a trade-off between the Business of Journalism and the content. ”
She said trust levels were generally low across all journalism in New Zealand and the world. Many readers wanted to see fewer articles they considered “clickbait” and more articles on topics that were important to them, she said.
Since 2022, she said, the board had embarked on initiatives to “relentlessly focus” on the quality of its product.
This included article and journalist scorecards, “which rank every article and every journalist based on performance metrics – such as growing subscriptions and audience engagement”.
The NZME newsroom’s operating model had been recently restructured “to ensure we have the right focus to drive quality and revenue”.
There had also been technology advancements, including more personalisation of news.
“The quality of journalism debate is very different from the choice of political leaning,” Chapman said.
“With over two million readers, NZ Herald takes a deliberate position of being as broad as possible. We do this to maximise audience and revenue.
“We believe some supporters of Mr Grenon are motivated by supporting certain political perspectives.”
She said an example of this was a letter Grenon sent the NZME board on Sunday, in which he suggested Caniwi Capital executive chairman Troy Bowker be appointed as an alternate director to an original nominee, Caniwi Capital managing director Des Gittings.
“Mr Bowker being an individual who has been reported as having made comments that are against appealing to a wide range of perspectives,” wrote Chapman.
The letter quotes a BusinessDesk story from early March which cited a Bowker text message in July 2023: “With subscription services that claim to be a business news site, I don’t want to read any stories that piss me off.”
Chapman said: “We worry what this might do to maintaining a broad audience and its impact on staff and revenue.”
But Bowker says the comment has been taken out of context and amounts to a personal attack on him.
“If the transcript of the discussion was accurately reproduced, the text extract should have had me saying that modern subscription-based media needs to serve up content that better resonates with its target audience,“ Bowker told the Herald.
“I definitely do not think media should only cater for one perspective: quite the opposite. I’m a big believer in free speech and I think the media needs more diverse views not less. However BusinessDesk subscribers don’t pay for social commentary; they want business articles.”
Chapman said Grenon had been “open in the media about what he sees as the board’s role in actively managing media”.
“In his latest correspondence, Mr Grenon has stated that editorial policy will be acknowledged as the responsibility of the NZME board, including processes to ensure compliance.”
She said Grenon proposed a small editorial board be established “to raise standards and to be ‘a bit of a brains trust to raise the level of insight’.” She said Grenon had said the editorial board would be chaired by blogger and lawyer Philip Crump, who is another of his board nominees.
“Whilst we acknowledge that ultimately the [NZME] board is responsible for quality, we are also very against the board interfering with editorial independence,” said Chapman.
“To attract the right talent and create the best content, the current board believes the journalists in the newsroom need to be independent.
“The board and CEO’s role is about selecting the best people to lead the newsroom and monitoring the processes to track and improve quality and revenue, and not to control the news.
“There are clear global examples of politically driven or high-net-worth individual ownership resulting in adverse financial outcomes for media businesses.
“We are concerned that the proposal is a play by Mr Grenon to exercise control over a newsroom, rather than anything else.
“Mr Grenon has previously owned Centrist and shown an interest in Stuff. We are concerned this will have an adverse effect on the company.”
Grenon told the Herald earlier in March: “Many of the shareholders supporting me are funds [that may have small investors] trying to make a profit.
“It is concern about operational aspects of NZME that is driving this change. The editorial content is very much a side issue but the quality of the journalism does impact everything else in the business and is also the board’s ultimate responsibility.
“The new board intends to improve on the journalism, with an emphasis on factual accuracy, less selling of the writer’s opinion and appealing to a wider political spectrum.”
‘Control of the boardroom’
Chapman raised concerns about Grenon having majority control, or a casting vote, if any of his several proposed board structures were successful.
“We are concerned that the board structure will result in Mr Grenon and his proposed directors controlling the decision-making of the company,” she said.
“All shareholders’ views need to be considered when important decisions are made, not just the views of a few.
“There is a risk that Mr Grenon prioritises his own agenda at the expense of the best interests of the company and all its shareholders.
“We see significant risk that Mr Grenon’s proposal will deprive the company of the benefit of a board which represents the voices of all shareholders.”
Grenon’s proposal
It has been an eventful four weeks at NZME – owner of the NZ Herald, Newstalk ZB, BusinessDesk, OneRoof and a number of entertainment radio stations and regional news brands – since Grenon was revealed to be a substantial shareholder on March 3.
Grenon holds 9.97% of NZME, with more than 18.7 million shares, and is seeking to become chair at NZME’s annual shareholders meeting.
He had originally nominated three businessmen – Crump, Gittings and retail industry executive Simon West – to join him on the new-look board.
In his first letter to NZME shareholders, released on March 21, Grenon took aim at the company’s public disclosures; “a consistent pattern of overpromising and under-delivering since Covid”; cost discipline, including the chief executive’s salary and other costs; journalism; and general staff morale.
Grenon believes, given the indicated support for his proposal so far and his analysis of voting at last year’s shareholders’ meeting, he will earn “overwhelming majority” support.
Grenon initially told NZME he had base support from at least 37% of the company’s ownership, including his own almost 10% shareholding, the almost 20% support from NZME’s biggest shareholder, Spheria Asset Management, and more than 3.5% support from Bowker’s Caniwi Capital and other nominee accounts.
In a later update to the NZX, NZME said Grenon had indicated he had around 47% support, following an additional 10% of shareholders offering their backing.
“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 a new letter to NZME shareholders released last week.
“However, I continue to engage in discussions with these shareholders, receiving valued perspective on the make-up of the new board.”
In his second letter to shareholders, Grenon raised the prospect of a compromise, by having up to eight board members, including himself as chair and his three nominees.
He suggested the additional four could come from the current board or advisory boards of one of NZME’s businesses; senior management – “most likely CEO Michael Boggs” – and a nominee from another substantial NZME shareholder, Osmium Partners who have separately nominated two directors.
“Other shareholders have expressed thoughts on the board appointments, and I have to see how many can be accommodated. Regardless of the outcome of these discussions, there are now other shareholders in the mix that total well over 15%.”
Last week, influential Australian media analyst Roger Colman said he backed Grenon for a board seat, but not his three other nominees, because they lacked media experience. Colman described a 9.97% shareholder seeking up to an 80% majority of the board as an “overreach”.
Grenon told the Herald earlier: “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.”
Board governance
In NZME’s board letter today, Chapman said the company had now received three potential board structures from Grenon so far, “giving uncertainty to shareholders”.
“We have many concerns around the various proposals for the board structure provided by Mr Grenon as they do not satisfy the requirements of the NZME board charter or reflect good corporate governance.”
For example, she said, the existing board was 100% independent; the new board would not be.
The proposal to include Bowker as an alternate director had been received yesterday; the board had not had a chance to determine whether he would be independent.
“Mr Grenon’s nominees in his letter to shareholders of 6 March 2025 have minimal New Zealand public company governance experience and little board committee experience,” said Chapman.
“Mr Grenon’s latest proposal of 30 March 2025 continues to have each of these nominees as either a director of the company or its subsidiary OneRoof.”
She said if all existing board members were removed, there would be “insufficient continuity, risking a loss of momentum on value-enhancing initiatives”.
“Replacing the full board with no transition proposed is extremely destabilising for NZME and could have a large negative impact on shareholder value.”
What happens from here?
Today’s notice referred to the two earlier letters from Grenon to other shareholders. Those letters have both been publicly released over the past 10 days.
“Mr Grenon’s shareholder letter dated 26 March 2025 and correspondence to the board dated 30 March 2025 included new information regarding composition of the NZME board following the annual shareholders’ meeting (if Mr Grenon’s proposals were to succeed),” said the NZME notice today.
“The company and the NZME board have taken external legal advice and the NZME board has determined that it is appropriate and in the best interests of the company to delay the annual shareholders’ meeting to Tuesday 3 June 2025.”
This would provide “an opportunity to engage with shareholders in respect of the new information and to allow shareholders to consider such information and whether they wish to put forward any other director nominations”.
NZME said it was opening a new period for the nomination of directors today. This would close at 5pm on Monday, May 5.
“The nominations of directors received from JTG 4 Limited and Osmium Partners, LLC during the previous nomination period (which ended on Tuesday, 11 March at 5pm NZT) will need to be resubmitted to NZME,” says the notice.
“NZME will contact both JTG 4 Limited and Osmium Partners, LLC to obtain confirmation as to whether or not their previous nominations are resubmitted.
“Nominations may only be made by a shareholder entitled to attend and vote at the annual shareholders’ meeting.”
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.
