Rinehart ally takes Fairfax board seat

Fairfax Media has extended an olive branch to biggest shareholder Gina Rinehart with the appointment of her friend and ally Jack Cowin to the board of the company.

Mr Cowin’s appointment as an independent director is effective immediately.

Mrs Rinehart, chair of Hancock Prospecting and Fairfax's largest investor with a 14.9 per cent stake, had previously demanded two board seats and an independent directorship for Mr Cowin.

In a statement to the ASX, Fairfax chairman Roger Corbett said: "Our discussions with Mr Cowin over recent months have made it clear that he has considerable experience to add to the company".

Canadian-born Mr Cowin, who sits on the board of Ten Network with Mrs Rinehart, is the chairman of Competitive Foods Australia, which runs the Hungry Jack's and KFC franchises.

Mr Corbett said that Mr Cowin's appointment was not "indicative or connected to the potential outcomes of the company's inconclusive discussions with Hancock Prospecting."

 

Fairfax has so far refused Ms Rinehart's request for board representation, citing her refusal to agree to the board's governance principles, one of which enshrines editorial independence. In her early approach to the Fairfax board, Mrs Fairfax had allegedly demanded the right to hire and fire the group's newspaper editors..

A senior Fairfax source stressed today that Mr Cowin’s appointment had no bearing on Mrs Rinehart’s push for boardroom representation, and said that discussions with Mr Cowin, who is currently in St Tropez, were finalised this morning.

The source said the independent directorship was a standalone appointment, and Mr Cowin had signed up the board’s governance principles following weeks of discussions.

The governance principle to which Mr Cowin has agreed is: “At Fairfax a key value is editorial independence. Day to day editorial direction and decisions on stories is a matter for the editors, not the board.”

No further talks have taken place with Mrs Rinehart about her request for two seats on the board of the company, the Fairfax source said.

In a statement to the ABC’s Four Corners program in late June,  Hancock Prospecting said that the company had hoped that Mrs Rinehart would be viewed as a saviour to the ailing media empire.

"Fairfax's largest three mastheads have been declining in circulation for five years, a long time," the statement said. "Fairfax's share price has also declined significantly, some approximately 90 per cent."

Fairfax recently announced a major restructure involving the loss of 1900 jobs, slimmed down metro newspapers and a heavy focus on digital publishing.

Shares in Fairfax were flat at 56c in this morning’s trading, at 10.18am.

Source: http://www.theaustralian.com.au/media/jack-cowin-joins-fairfax-board-amid-stoush-with-gina-rinehart/story-e6frg996-1226429752758