THE BOARD of Independent News & Media intends to recommend to shareholders that they vote against the re-election of Paul Connolly, one of two representatives of Denis O’Brien on the INM board, at its annual meeting on June 8th.
This follows a lengthy and stormy board meeting in Dublin yesterday at which INM chairman James Osborne asked Mr Connolly to resign from the board.
Mr Connolly refused to resign and intends to offer himself for re-election at the INM agm.
The chairman’s request followed Mr Connolly’s decision on Wednesday to take legal action in the High Court to have a €1.87 million compensation package paid last week to former chief executive Gavin O’Reilly declared unlawful.
The case will be heard on Monday. This unprecedented move is believed to have infuriated INM’s chairman James Osborne and has added to the recent turmoil at the company.
INM’s board is seeking to have Mr Connolly removed from the board for failing to act in the best interests of the company.
It is understood that all board members excluding Mr Connolly and Lucy Gaffney, who also represents Mr O’Brien on the board of INM, voted in favour of the motion to recommend to shareholders that they vote against Mr Connolly’s re-election.
No comment was available last night from either side.
Separately, Baroness Margaret Jay has informed the board of her decision to step down as a non-executive director.
Baroness Jay was INM’s senior independent director and had served on the board for nine years, a period after which, under corporate governance rules, she would no longer have been considered independent.
She became the second non-executive director to step down from the board of INM this week after Swede Bengt Braun resigned on Wednesday, citing increased commitments with Scandinavian media group Bonnier.
The decision to seek Mr Connolly’s removal from the board of INM is the latest in the ongoing saga between Mr O’Brien, and INM and the O’Reilly family.
Last year, Leslie Buckley, then a representative of Mr O’Brien on the INM board, was ousted by shareholders at its AGM. This followed reports from shareholder advisory groups ISS and Glass Lewis indicating Mr Buckley could not be considered independent given his close links with Mr O’Brien, and that he lacked relevant industry experience.
For their part, the O’Brien side questioned the independence of Mr Braun, given that both he and Mr O’Reilly had served together on the board of World Association of Newspapers, a trade representative body.
Both sides will be expected to lobby furiously in relation to the re-election of Mr Connolly.
A majority of those who cast their votes at the agm, either on the day or by proxy, will be required to oust Mr Connolly.
A lot will depend on the numbers who vote, which is usually between 60 and 70 per cent.
Mr O’Brien’s 22 per cent holding will be voted in Mr Connolly’s favour.
