Nine Entertainment board fight sparks Patrick Allaway’s exit

Nine Entertainment’s board tensions have spilt over, leading to the earlier-than-expected resignation of independent director Patrick Allaway.

Former Fairfax Media director Patrick Allaway has quit Nine Entertainment’s board. Picture: Supplied.

Nine Entertainment’s board tensions have spilt over, leading to the earlier-than-expected resignation of independent director Patrick Allaway, who joined the broadcaster following its $4bn merger with Fairfax Media

The move could push back Nine’s search for a new chief executive, following the sudden resignation of Hugh Marks last November.

Mr Allaway’s exit weakens the hold of the Fairfax-aligned directors in the boardroom and further strengthens those aligned with Nine’s traditional television broadcasting business at the cost of its publishing arm. Mr Allaway cited increasing commitments with his other role as the chairman of Bank of Queensland as the reason the for exit.

Nine chairman Peter Costello said on Monday evening that Mr Allaway planned to leave in early April. His comments come just days after outgoing CEO said the board is “well progressed” in its search to find his successor.

“This will allow for an orderly transition for the business, in light of the appointment of the new CEO and succession arrangements,” Mr Costello said.

Nine’s statement to announce Mr Allaway’s imminent departure came just hours after an unsourced report in Nine’s newspapers said the company was investigating deputy chair Nick Falloon, who was Fairfax’s chairman before its merger, over allegations he misused a corporate golf club membership. The report said Nine has engaged legal firm Ashurst to investigate the claims.

The sudden resignation of Mr Allaway and investigation into Mr Falloon suggests ructions over the appointment of the next CEO.

The Australian understands it is a three-horse race for the top job, between Nine executives publishing boss Chris Janz and Stan boss Mike Sneesby, and outsider Carl Fennessy.

Among the directors previously on the Fairfax board Mr Janz is seen as the preferred candidate, while Mr Sneesby is seen as the leading choice among longer term Nine board members, including Mr Costello, who has been on the board of Nine for eight years. He was appointed chairman in March 2016.

A Nine spokesman declined to comment on the reported investigation into Mr Falloon, noting: “Nine has an anonymous whistleblower line and any matters raised there are treated seriously, investigate thoroughly, independently and confidentially and appropriate actions are taken as a result.”. The Australian sought comment from Mr Falloon.

Mr Marks told investors last Wednesday that the board was making inroads with its CEO search.

“They’ve done a really exhaustive process and they will make an announcement I guess when that process is completed in due course,” he said in an investor call, in response to a question about the “deafening” silence on the progress of the CEO search in Nine’s earnings statements.

At the time of his departure news, Nine said Mr Marks would leave the media group some time by June after more than five years at the helm.

Mr Allaway said there has been “much growth and change” with the business, but it was time to move on now.

“It was always my intention to stay on the board through the merger and to see the success we have created is gratifying,” he said in the statement.

“It has been an honour to work with both our chairman and the board as we brought these two media companies together and have seen them flourish. With more intense duties now as Chairman of Bank of Queensland I have taken this opportunity to step down and allow for orderly renewal on the Nine board.”

Mr Costello thanked Mr Allaway for his commitment to Nine and Fairfax.

“Patrick has made an outstanding contribution to the company particularly with his financial skills. Together we have worked to ensure a successful future for this media business and I wish him well for the future.”

The former federal treasurer said Mr Allaway’s replacement would be announced closer to his departure.

Mr Allway joined the Fairfax board in April 2016, and a few months later the merger between Nine and Fairfax was unveiled. He subsequently joined the board following completion of the merger in December 2018.

He has worked in the financial industry across capital markets and corporate advisory for 30 years, and 16 years as a non-executive director across property, retail, media, and finance, according to Nine’s website.