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Published 25 February 2013 12:08, Updated 25 February 2013 22:40
Hamish McLennan... Ten’s fifth chief executive in two years, and one with very close links to News Corp. Photo: Peter Braig
The Ten Network, like any free-to-air television station, is not shy when it comes to running repeats, so perhaps the “here we go again” chief executive merry-go-round should not be considered out of the ordinary. Ten Network Holdings’ new chief executive Hamish McLennan, who takes up his position on March 18, becomes Ten’s fifth chief executive in two years.
His predecessor, James Warburton, who was unambiguously dismissed by the Ten board on Friday, held his position for just 13 months. He had been hand-picked by Ten chairman Lachlan Murdoch, who had briefly served as interim chief executive prior to Warburton’s appointment when chief executive Grant Blackley was moved on in 2011.
The television industry has never been a place for the delicate of heart, so Warburton will not be entirely surprised by the board’s decision to give “notice of termination . . . effective immediately”, despite reports that Murdoch had assured him in December that his job was safe. In the volatile, hard-nosed world of television, perhaps Murdoch meant it at the time. Or perhaps he didn’t.
Warburton presided over a line up of deep cuts, failed shows, falling ratings and falling advertising revenue – and a loss of $12.9 million for the 2012 financial year. Although hardly an auspicious start, it’s difficult to imagine what the board expected of Warburton in just 13 months.
The board, and his champion Lachlan Murdoch, wanted him badly enough to fight his previous employer, Kerry Stokes’ Seven Network, in court, resulting in Warburton, nicknamed “Mr Ambitious”, going on gardening leave for 10 months before he could take up his new role at Ten.
The board’s action leaves no doubt that it considers Warburton to have failed in his mission to lift the performance of the struggling Ten network. But given that his tenure was so dramatically truncated – the board could not even bear to contemplate Warburton serving his two-year contract – then surely his appointment and subsequent failure must also be board’s failure.
From a corporate governance perspective, Warburton’s departure should prompt some soul searching at the Ten board. It’s all well and good for Lachlan Murdoch to declare McLennan a “world class CEO with a strong record”. Is he suggesting that Warburton was not? In which case, on what basis was he appointed?
The finer points of corporate governance niceties, let alone introspection, are unlikely to be first-order priorities at Ten. The Ten board, which includes billionaires chairman Lachlan Murdoch (who owns a 9 per cent stake), James Packer (9 per cent), Gina Rinehart (10 per cent) and regional TV broadcaster Bruce Gordon (15 per cent), is of a more entrepreneurial bent.
For that reason, the board is unlikely to be troubled by the perception that the relationship between Ten and News Corporation is uncomfortably close. McLennan is currently executive vice-president, office of the chairman, at News Corp – in effect, chairman Rupert Murdoch’s right hand man. Rupert’s son Lachlan, as well as chairman of Ten, is a director of News Corp.
It is incumbent on the Ten board to ensure that it has the right leadership at the helm of the company. It may well be that McLennan, a prominent advertising industry chief executive prior to joining News, is just the man to revitalise Ten. But now it’s up to the board to show that it takes its corporate governance responsibilities just as seriously and that the chief executive merry-go-round of its making should not cause investors outside the billionaires’ bloc unease. Appointing new chief executives is the board’s right, but it’s also a responsibility that deserves more consideration and consistency than has been in evidence to date.