Yahoo Finance Nine headed for board shake-up as former Fairfax director resigns
The Nine Entertainment board is facing another shake-up after the sudden resignation of a director just three months after the chief executive, Hugh Marks, quit.
The independent director Patrick Allaway, who joined the board after the $4bn merger with Fairfax Media in 2018, blamed more “intense duties” in his other role as chairman of the Bank of Queensland for his decision to step down.
However, he resigned the day after the company’s own mastheads reported on an investigation into the deputy chairman, Nick Falloon, another one of the three Fairfax directors to join the Nine board.
Related: Nine to give back $2m in jobkeeper payments after posting $182m profit
Falloon and Allaway, along with Mickie Rosen, made up the Fairfax faction on the board and do not always see eye-to-eye with the Nine directors led by the chairman, Peter Costello, sources said.
The Sydney Morning Herald reported on Monday that Falloon was being investigated by his own company over allegations he allowed his son to use a corporate membership at a prestigious northern Sydney golf club. Falloon was reported as saying there were no issues with his use of any membership and he had not spent a dollar of company money. There is no suggestion Falloon has misused any company funds.
Nine said the investigation was the result of an anonymous letter, which was also critical of the way the board handled Marks’ departure. Marks resigned in November after his relationship with a former Nine executive, Alexi Baker, caused a split on the Nine board over issues of governance.
There has been tension on the board since the TV network merged with the legacy newspaper publisher of the Sydney Morning Herald and the Age, and became sole owner of radio broadcaster Macquarie Media, owner of talkback stations 2GB and 3AW.
The independence of the quality newspapers Nine inherited was called into question when Nine held a $10,000-a-head Liberal fundraiser in 2019, and again by journalists from the Age last year who told management they were worried about maintaining the “proud reputation and independence” of the paper because editors were putting pressure on reporters “to produce particular angles”.
The Age protest resulted in the departure of the editor Alex Lavelle and the appointment of the former Guardian Australia Melbourne editor Gay Alcorn.
Guardian Australia revealed last month that Marks had told Age journalists the media company will stop donating to political parties altogether after records showed the publisher gave twice as much to the Liberal party ($62,906) last financial year as Labor ($27,500).
Costello told the Australian Stock Exchange on Tuesday that Allaway would leave in early April.
“This will allow for an orderly transition for the business, in light of the appointment of the new CEO and succession arrangements,” Costello said.
Allaway said the board and management had worked together to create Australia’s largest locally-owned media company.
“It has been an honour to work with both our chairman and the board as we brought these two media companies together and have seen them flourish,” he said.
“With more intense duties now as chairman of Bank of Queensland I have taken this opportunity to step down and allow for orderly renewal on the Nine board.”
Related: Nine agrees to join Google News Showcase in Australia for reported $30m a year
Costello thanked Allaway for his commitment to both Nine and Fairfax, which had benefited from his financial skills.
The ructions on the board came a week after Marks told investors there had been an “exhaustive” search for a successor and pledged to give $2m in jobkeeper payments back to the government after posting a $182m net profit.
After he resigned late last year Marks revealed he chose to go early because his relationship with Baker had created too much drama.
“When it became clear this relationship was going to become a subject of ridiculous gossip and so much pressure was going to come on the people in the business I just said to myself the right thing to do at this point is to take that pressure off the business and its people,” Marks told his own publication.
Frontrunners to replace Marks include Nine’s chief digital and publishing officer, Chris Janz, and the head of Nine’s streaming service Stan, Mike Sneesby.
Nine confirmed it had an anonymous whistleblower line and “any matters raised there are treated seriously, investigated thoroughly, independently and confidentially and appropriate actions are taken as a result”.
