Text: TVNZ Board report on Fraser resignation

Below are excerpts of the TVNZ board's report on chief executive Ian Fraser's resignation. It was sent to Broadcasting Minister Steve Maharey and released by him yesterday.

Dear Minister

THE CIRCUMSTANCES OF THE RESIGNATION OF CEO IAN FRASER FROM TELEVISION NEW ZEALAND ON 28 OCTOBER 2005

Background

Each year the Board and senior executives (Excom) of TVNZ in October hold a two day "strategic advance" to focus on the 2-5 year horizon. This year it was planned to be in Auckland on Thursday, 27 and Friday, 28 October.

The first day was a review of the development of digital television in New Zealand in terms of:

* public policy

* transmission proposals including a presentation by BCL

* first draft costed strategic plan.

The second day covered viewer research, channel positioning, competitive analysis and funding.

The first day is normally preceded by a short Board meeting - in this case to approve the annual report and accounts.

There was also a report back from the Chairman of the Remuneration & HR Committee - however that was held over until the morning of the second day. This required consideration by the Board of a recommendation for a News and Current Affairs employee contract of over $300,000 pa. The Board has, as part of its delegated authorities, retained the approval authority for contracts in excess of $300,000 pa payable to employees and individual contractors.

The CEO was advised during the discussions that the Board was of the view that he should be involved in discussions and contract negotiations with high profile presenters. The Board's view was that this reflected his experience and his ability to relate to these people as a former presenter and that this should bring about the best results for the Company. The Board resolved that this should be discussed between the Chairman and CEO.

Events Leading up to the Resignation of the CEO

This suggestion was not accepted by the CEO. He left the building and did not return to participate in the Strategic Advance. Prior to his departure to Wellington he emailed to the Chairman a short note saying that he "intended to resign his position as CEO".

The response of the CEO over this matter was totally unexpected by the Board.

Subsequent Events

On being informed the Board resolved to leave the matter for the Chairman to discuss with the CEO at a meeting planned in Auckland on Monday, 31 October. Events, however, subsequently overtook this with media speculation mounting. It was determined that "a press release" was required. In the event a joint release could not be agreed between TVNZ and the CEO and separate releases were made as follows:

[The attachments below refer to press releases issued by TVNZ and available at http://corporate.tvnz.co.nz/ (link at bottom of page)]

Attachment 1

TVNZ 30 October:

"The Chairman of TVNZ Mr Craig Boyce announced today………"

Attachment 2

Ian Fraser, 30 October:

"I can confirm that I told the Chairman of TVNZ on Friday that I intended to resign….."

The fourth paragraph of the CEO's release read as follows -

"The board of TVNZ is politically appointed. That makes it even more critical than it would be for a commercial board to stand well back from the day to day running of TVNZ, particularly our news and current affairs operation."

This caused such concern that a conference call of directors in the late afternoon of Sunday, 30 October determined that a further press release refuting the implication of board interference in editorial policy matters was released as follows:

Attachment 3

TVNZ, 30 October:

"Following the statement released earlier today………"

During discussion between the Chairman and CEO on Monday, 31 October Ian Fraser confirmed formally his resignation. It was also agreed that the CEO would make a further release.

Attachment 4

Ian Fraser, 31 October:

"A clarification. I want to make it clear ……."

Later in the morning of 31 October the Chairman and CEO agreed a short "way forward" press release as follows:

Attachment 5

TVNZ, 31 October:

"The Chairman and CEO of TVNZ met this morning ……"

In summary, the Board of TVNZ emphatically asserts that in its view it has never breached the rules relating to editorial independence as enshrined in the TVNZ Act. The Board also asserts it does not interfere with the day to day operations of the Company. It believes it understands and exercises proper governance.

Yours sincerely,

Craig Boyce
Chairman TVNZ