Independent News & Media has bowed to investor pressure to split the roles of chairman and chief executive, which are currently combined by the company's executive chairman, Sir Anthony O'Reilly.
"As it is clearly the established practice in Ireland to separate these roles, your board has decided to take steps to achieve this in your company during the coming 12 months," Sir Anthony told shareholders at yesterday's annual meeting. A sub-committee of the board is being set up to consider the issue and will make recommendations in "due course".
The move follows concern among institutional investors about corporate governance at the company which led the Irish Association of Investment Managers (IAIM) to request a meeting to discuss the issue earlier this year.
IAIM chief executive Ms Ann Fitzgerald welcomed yesterday's announcement which followed commitments made by Independent at the April meeting.
It is not yet clear whether Sir Anthony will step down as chairman or as chief executive. Some company observers expect him to remain as chairman with his son, chief operating officer Mr Gavin O'Reilly, succeeding him as chief executive.
Others are not so sure this will be the chosen course of action. "He may not be ready to do that but could decide instead to bring in an outsider as chairman," one analyst said yesterday.
Independent is also slimming down its board with a further two non-executive directors stepping down at yesterday's meeting.
Mr Jim McCarthy, who has been a director for 23 years, and Mr Ben Bradlee, who has been on the board since 1994, will both retire. This brings to seven the number of non-executive directors who have departed the board in the past year.
However, Independent has made just one new appointment to the board. Baroness Jay, a member of the company's International Advisory Board and a former British Minister of State at the Department of Health, will become a director with immediate effect.
Following the changes, the board will be made up of seven executive directors and 13 non-executives but further movement on the board, aimed at bolstering its independence, is expected over the next couple of years.
"We would look forward to more progress on this during the year," Ms Fitzgerald said.
Meanwhile, the company has been addressing the other issue of major concern to investors, its debt. It said yesterday it had successfully concluded a fresh issue of 225 million New Zealand dollars (€110 million) of cumulative exchange preference shares (CEPs) in New Zealand. This will refinance the existing NZ$182 million preference shares which were due to mature in November.
Following the issue, interest cover at the group will be 3.5 times and should be over four times by year-end. Independent said it had also signed a €588 million five-year agreement with its nine banks. "This financing, combined with the current de-leveraging programme and today's CEPs announcement, means that the company has no major financing requirements for the next five years," Sir Anthony said.
