Corporate Ireland spends an inordinate amount of time these days proclaiming how compliant it is with best practice on corporate governance. and then there is reality.
This week’s washing of dirty linen in public by Independent News & Media (INM) shines a very unwelcome light on practices at one of Ireland’s largest companies.
The media group confirmed its chief executive Robert Pitt and chairman Leslie Buckley had been at loggerheads over how much might be paid in any bid for national radio station Newstalk, owned by Denis O'Brien's Communicorp.
O’Brien is also the largest shareholder in INM and a long-time business associate of Buckley.
The statement stressed that discussions on this possible acquisition had ended at a preliminary stage and that the deal was never considered by the board.
The kernel of the dispute appears to have been Pitt arguing that any offer for the radio station should be on the basis of a valuation obtained by INM, while Buckley was pushing for a figure closer to a significantly higher valuation sourced by Newstalk itself.
Spats
Analysts Robert Stokes and David Jennings at INM's corporate broker Davy opined: "While such disagreements are commonplace in public companies, they usually do not reach the public domain."
They might be right on the second point but one has to hope that such spats are anything but “commonplace”.
A chairman pushing for his company to pay a higher price than that suggested by his chief executive? A chief executive so frustrated that he feels obliged to report the incident to the board?
And, finally, a board that decides such interventions “raise no issue of concern for the company”?
Commonplace? One hopes not.
Having felt sufficiently strongly to raise the issue at board level, it is difficult to see how Pitt’s position as chief executive has not been fundamentally undermined by the board’s view that such interventions are a normal part of life at INM.
Stokes and Jennings note that the “question arising for shareholders is whether the board and management can move on from this disagreement”.
Can they?
