Costello exit not the silver bullet for Nine’s board

Let’s be clear – whatever the blurry and potentially aggressive airport altercation Nine chairman Peter Costello had with a News Corp journalist, it wasn’t enough to see him marched into the board’s departure lounge.

It just tipped the balance against him.

Those who believe taking Costello’s scalp will allow the remainder of the Nine board and chief executive Mike Sneesby to breathe a sigh of relief that the crisis has been averted should watch this space.

Peter Costello talking to journalists after the incident involving a reporter.Credit: Alex Ellinghausen

Nine’s board and Sneesby have been under intense and sustained pressure for weeks. If Nine follows the script written by so many other corporate scandals, Costello’s departure is not likely to be a long-term governance stay of execution, but it’s a tipping point.

At best, it will give Nine’s board and management a bit of breathing space.

Ten days ago, a hastily convened Nine board meeting to deal with the runaway scandal surrounding Nine’s response to a series of harassment allegations against senior television executive Darren Wick had many stakeholders convinced that Sneesby’s days as CEO were numbered.

However, Sneesby survived in what could be described as a near (corporate) death experience. To have done so, Sneesby needed the support of chairman Costello, and the chairman needed most of Nine’s non-executive directors to fall into line.

The board then put out a detailed statement after that meeting that included the announcement of an external review. It also promised to put the safety of staff as a top priority and it openly encouraged whistleblowers and promised a cultural overhaul.

It was a comprehensive response but arguably one that closed the door after the horse had bolted.

There was disenchantment among the rank and file in the newsroom, and Nine media competitors could smell blood in the water.

As for the board, its dynamics have subsequently undergone a change. Costello’s wrangle with a Murdoch journalist was seemingly enough to fuel the Nine board’s tinderbox.

To be fair to Nine’s now ex-chairman, the footage was sufficiently unclear to ascertain whether Costello had any culpability.

But the incident, which went viral, was potent enough to hijack the agenda at Nine’s board meeting last Friday.

A board meeting on Sunday has turned out to be Costello’s last.

And he may not be the last casualty. Costello’s leaving statement referred to a board refresh that he said had been raised at the end of last year.

This will be no “one and done” situation. The pressure on Nine’s management will remain and the negative press won’t abate. If anything, detractors may yet come out of the woodwork and at some point, Nine’s shareholders will start to worry.

If the Nine board believes that sacrificing Costello will remove the turbulence, they may be disappointed. Costello’s replacement, Catherine West, now faces the Herculean task of steering the ship into safety.

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