NZME chief executive Michael Boggs. Photo / Michael Craig
NZME chief executive Michael Boggs. Photo / Michael Craig
A key NZME shareholder travelled from Australia on Wednesday for sessions with the billionaire investor who wants a board overhaul and some of the current directors. Here’s where he sits.
An influential NZME shareholder says he backs billionaire Jim Grenon’s bid for a seat on the media company’sboard but also wants to see chief executive Michael Boggs there – and would be comfortable if NZME needs to increase its overall number of directors from five to eight.
Australian shareholder and media analyst Roger Colman spent the day in New Zealand on Wednesday, meeting Grenon and the Auckland-based businessman’s three other NZME board nominees, Philip Crump, Des Gittings and Simon West, for almost two hours.
Colman also visited NZME’s headquarters in central Auckland to see NZME chairwoman Barbara Chapman and at least two current board members, Guy Horrocks and Sussan Turner.
Colman, a former Australian Olympic sailor, is navigating a careful course, wanting to ensure NZME – the owner of the NZ Herald, Newstalk ZB and property portal OneRoof – is not damaged ahead of, and after, a future-defining vote on April 29, which may see a clean-out of the existing five-member board.
NZME owns the NZ Herald, NewstalkZB, BusinessDesk and OneRoof; inset: NZME chair Barbara Chapman and shareholder Jim Grenon.
“The shareholder owns 10% in this company and has got some issues with the board’s performance – he is entitled to be a director,” said Colman, referring to Grenon.
“That’s standard in Australia – anybody between 10 and 20% should have a board seat. On that basis, I’m supporting Jim’s process for a seat.
“If what he wants to do is damaging for the company, I would have to reconsider but at the moment his statements are that he will not damage or do anything adverse for the [audience and customer] penetration of the company’s products.”
Grenon was looking to improve NZME’s financial performance and audience reach, said Colman, who holds just under 3% of the company himself 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 said he was still considering whether to support Grenon’s three other nominees.
They were all impressive and had been successful in their respective careers, he said.
“These people aren’t failures. The only question I’ve got is the media skills that are applicable to this company.
“The board’s got one media person, which is essentially Sussan,” he said, referring to Turner, a former MediaWorks chief executive and former TVNZ board director.
“It should have more. It should have the CEO on the board, given the fact that he’s got three million shares.
“More importantly, unlike most executives who sell their performance rights in the market, Michael Boggs has kept all his and kept reinvesting in the company. I think a CEO like that should be on the board to bring some more media experience immediately.”
He said Boggs was “probably one of the best performers in Australasia, right at the moment” in the way that he had steered the company through tough economic times.
Colman said he would not go into detail about what he talked about with the respective groups during his Auckland visit.
But he was concerned NZME continued to have institutional funds holding up to 20% shareholdings. A fund that no longer existed as an NZME shareholder had been responsible for the company’s “highly regarded” chairman Peter Cullinane stepping down in 2020.
“I was very sad to see Peter Cullinane go because of an institution. It’s been pass-the-parcel,” Colman said, referring to the holdings.
“It’s been an unfortunate position with the company that the institutions have had such a significant position.
“It’s provided an unstable share register. I proposed quite long ago that it should have a shareholder benefit scheme to bring much of the New Zealand population into being an equity holder in the company.
“It should have been acted upon – we wouldn’t be in this position now.”
An eight-member board?
NZME currently has five directors. Its constitution currently allows for a maximum of eight.
The current five directors are all independent. What still has to be determined by the existing board is how many of the six new nominees – Grenon and his three nominees, and another shareholder Osmium Partners’ two nominees – could be considered independent.
Colman reiterated a view he publicly spoke about at NZME’s last annual shareholders meeting: that current director David Gibson should come off the board to be replaced by a digital classifieds expert given the importance of real estate platform OneRoof.
He also wanted to see Chapman stay on as chairwoman for at least 12 months.
He was comfortable with having up to eight directors but he said it had to be “everybody that counts”.
“You either count on the share register or you count on ability.”
Company performance review
Colman wants the company to provide shareholders with detailed data from the likes of a merchant bank to either prove or disprove Grenon’s criticism of the financial performance of the company.
That information needed to be supplied as part of the documentation ahead of the April 29 shareholders' meeting, he said.
“Then it’s got to discuss what it can do in the future. And Jim’s got a view of what he’s going to do in the future.
“There’s the question whether cost-based reductions are going to be zero, medium, or heavy.
“I don’t know what his thinking is, but a new person will always find cost reductions. A new broom finds more dirt.”
Editorial independence
Colman said the owners of a media company had the right to set editorial policy.
He said Grenon had told him he would need to work carefully in this area; Colman did not believe there would be a standoff.
“He is working on the basis that all voices in New Zealand work through NZME products and that NZME products lead debate where it’s required in the nation.
“The most important thing about NZME is that you have an election every three years, but the newspaper can help achieve things in between on behalf of its readers and also for the population. It’s an important component of the New Zealand democracy between elections.”
NZME's Newstalk ZB is the highest rating commercial radio station, with a line-up of hosts including Ryan Bridge, Mike Hosking and Heather Du Plessis-Allan. Photo montage / Oliver Rusden
On operational matters, he believed the Herald newspaper needed a design revamp – “but that’s a side issue” – and he was supportive of the planned new Herald Now video news channel.
He believed the host, Ryan Bridge, was a future New Zealand version of US broadcasting legend Walter Cronkite.
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.
