INDEPENDENT NEWS & Media lost its seventh director in eight weeks yesterday when Englishman David Reid Scott resigned as a non-executive member of the board. This left INM with just four directors and put it in the embarrassing position of not being in compliance with its own articles of association.
Mr Reid Scott’s decision comes just six months after he was headhunted by INM and is the result of the board declining his offer last Friday to succeed James Osborne as chairman, after the lawyer had been voted off the board at the company’s annual meeting by leading shareholders Denis O’Brien and Dermot Desmond.
INM said yesterday that “steps will be taken as soon as practicable to make additional appointments to the board”.
It is not clear if this will involve the directors seeking to co-opt others to the board or whether an extraordinary general meeting will have to be called to resolve the matter. INM must have a minimum of five directors to comply with its articles of association.
Mr Reid Scott’s decision hints at the growing influence of Mr O’Brien, who owns nearly 30 per cent of INM, over the company’s affairs.
INM’s remaining board members are chief executive Vincent Crowley, Frank Murray, and Mr O’Brien’s representatives – Paul Connolly and Lucy Gaffney.
Mr Reid Scott told The Irish Times that he resigned yesterday morning.
“It’s been a difficult few days, to put it mildly,” Mr Reid Scott said. “I told my colleagues when we met on Friday that if I was supported for chairman I would take on the role. It needs a fairly experienced hand. If I wasn’t I would resign. I saw no purpose in remaining on the board . It became clear that I wasn’t going to be supported so I did what I said I would do.”
He had wanted to “oversee the board in an appropriately independent way. we never even got to the point to seek the assurances I would have wanted.”
He had wanted to “bring in new non-executive directors independent of the two major shareholders ”.
Mr Reid Scott said he had been “encouraged” by Mr Osborne – who became chairman only last October – to join the board. “I thought it was a potentially interesting challenge,” he said.
He was critical of the decision by Mr Connolly to seek to have the €1.87 million exit payout to Mr O’Reilly declared unlawful in the Commercial Court.
“My view is that it was completely unnecessary and completely unacceptable,” he said. “It is damaging to the company, and costly to the company.”
