Ron Walker, the non-family chairman of Fairfax Media Ltd, will meet with investors next week to discuss his continuation with the company after two board members, both of the founding Fairfax family, stated they would not support his re-election as chairman.
The family owns 9.7% of Fairfax Media shares through its private company Marinya Media. The company publishes newspapers such as Melbourne's Age and the Sydney Morning Herald. In a joint statement released last week, board members John (pictured) and Nicholas Fairfax said: "Mr Walker is well aware of significant shareholder dissatisfaction with his tenure as chairman. Marinya, for one, cannot see how Mr Walker's stated intention to delay his retirement assists the company and its shareholders."
They continue: "After years of under-performance, Fairfax Media has a new management team, a streamlined cost base and is poised to re-build some of the shareholder value that has been destroyed. For the company to fulfil its potential we believe it also needs new board leadership to ensure that the board is unified, functions effectively and provides sound strategic direction. We do not believe that the current board under the leadership of Mr Walker meets these tests.
"We will be voting the Fairfax Media shares we control (whether through Marinya Media or otherwise) together with any shares for which we hold open proxies, against the re-election of Mr Walker," they concluded.
However, the view of the family is at odds with that of the other independent board members, who released a counterstatement in response to the comments of John and Nicholas. It simply said: "Mr Walker has led our company with great distinction and we will continue to support his leadership."
The divide in the board has prompted Walker to seek the views of institutional investors next week in order to assess how best to progress. He had previously stated he planned to retire from the company in 2010 and would stand for re-election for another year in November 2009.
Founded in 1831, Fairfax Media is Australia's oldest and second largest media company. Its most recent figures put company revenues at $2.6 billion (AUD). However, company shares have lost more than half their value throughout the four years Walker has been chairman.
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