INDEPENDENT NEWS Media (INM) has moved in advance of a new governance report from “dissident” investor Denis O’Brien to publish favourable findings by a Harvard academic commissioned by its board to assess its governance.
Separately, it emerged the company has given commitments to replenish its board and board committees in a recent engagement with proxy advisory firm Institutional Shareholder Services (ISS).
In a stock market notice last night, INM said a “thorough, independent analysis” of its governance by Prof Jay W Lorsch of Harvard Business School found its board to be “functioning effectively” and its management to be delivering “record revenues”.
With Mr O’Brien bringing his INM stake to 25 per cent in recent days, the Lorsch report was released a week before the company’s agm in London next Wednesday.
An INM spokesman said the report had the effect of “setting the record straight”, when asked whether it was designed to pre-empt an updated report for Mr O’Brien from Yale academic Dr Stephen Davis. The update is expected before next week’s agm.
A report by Dr Davis before last year’s agm was highly critical of governance at INM, which rejected its findings.
“The sole purpose of this document is to attempt to counteract all the extremely incisive, professional and independent corporate governance reports which highlight the failings on the board of INM,” Mr O’Brien’s spokesman said. “The company is now clearly concerned about its deteriorating image among the international investment community.”
Responding, an INM spokesman said the report was part of a continuous evolution process on corporate governance that predated “the dissident shareholder’s appearance” on the INM share register. “Prof Lorsch’s observations are a damning indictment of Dr Davis’s report, of his sloppy methodology and of the self-serving nature of the agenda which it supports.”
Stating he had personally interviewed each INM director, Prof Lorsch said “one-sided attacks from self-appointed governance watchdogs and gurus” did not conform with the requirements of the combined code on corporate governance for “reasonable dialogue and resolution” of issues that arise. He said the INM board was not perfect but that few boards were. He said it had a “healthy culture of open debate”.
ISS advised clients not to vote for the re-election of non-executive directors Liam Healy, Brian Davy and Ivor Kenny at this year’s agm. In previous years, it advised against the re-election of all non-executive directors.
“However, having engaged with the company and on receiving commitments relating to the future structure of the board and committees, ISS has considered it appropriate to apply pragmatism to vote recommendations,” its recent report said. The time frame for such commitments was not clear from the report.
