The campaign to rid Fairfax of Mark Burrows

It was good to see The AFR's Chanticleer columnist Alan Jury weigh in last Thursday on the scandalous decision of Fairfax Media deputy chairman Mark Burrows to advise Lachlan Murdoch on his $3.3 billion Consolidated Media Holdings privatisation deal with James Packer.

Whilst Jury's language was overly cautious with terms such as "more than the odd eye-brow raised", his column item was more than we've seen from the News Ltd press which would ordinarily be ripping into a Fairfax director who did something so blatantly unacceptable.

In another example of what a small media pond we live in, Burrows was advising Lachlan Murdoch through his role as chairman of Lazard Carnegie-Wylie and both Mark Carnegie and John Wylie are substantial investors in the excellent new website Business Spectator, which now houses Australia's largest stable of respected corporate commentators in Alan Kohler, Stephen Bartholomeusz and Robert Gottliebsen.

We haven't yet seen a single thunderous attack on Burrows from a credible party. If our media loses its fearlessness, then these sorts of untenable conflicts will simply keep on occuring.

I've been having a go at Burrows for his Murdoch links for years as you can see from this account of the 2000 Fairfax AGM.

Burrows has been on the Fairfax board since 1996 and last faced the shareholders in 2005, so he'll be up for re-election at this year's AGM in October.

Today I'm revealing that we'll be adopting the same tactic that contributed to the departure of Steve Vizard from the Telstra board in 2000 - a board tilt specifically based around the elimination of a conflict, which is explained in this 2001 Crikey subscriber edition.

In Vizard's case, he bailed nine days after Telstra received the nomination with the following platform:

He is offering himself as an alternative to Mr Steve Vizard who, in Mr Mayne's opinion, has some conflicting external commercial relationships through Sportsview.com, MultiEmedia.com Ltd and Virtual Communities that make him unsuitable to continue as a Telstra director.

It will be interesting to see if this promised Fairfax board tilt is used to put some pressure on Burrows and force a resignation, or whether he can somehow neutralise enough of the credible Australian business media to survive.

If the Fairfax directors want a noisy contested election around the Burrows conflict issue, then they should let chairman Ron "king of the conflicts" Walker tolerate the intolerable by harbouring a key Murdoch family friend and adviser on the board of our most venerable media company.

If they want a quiet AGM, then Burrows needs to be ousted quick smart.

The major Fairfax shareholders are as follows:

Fairfax family: 14.31%
Commonwealth Bank: 11.84%
Perpetual: 10.73%
Goldman Sachs: 7.37%
NAB: 5%
UBS Nominees: 5%

That's 54% in the hands of six shareholders and a board that includes two members of the Fairfax family plus the chairman of Perpetual, Robert Savage.

John B Fairfax holds all the cards here and it really is time he flexed his muscles by moving on both Burrows and Ron Walker to reclaim his family's leadership of the company.

Savage knows something about board conflicts as he lost Sandra McPhee as a director at Perpetual last year when she declared her husband's mortgage business was directly competing with Perpetual. Isn't that precisely what the privatised Consolidated Media Holdings will be doing with Fairfax Media?

Companies are often pretty shy about going into the details of conflicts of interest when it is deemed appropriate that a director depart.

John Morschell bowed out as Leighton chairman in December 2003 with this statement which didn't identify the specific situation.

At least Jac Nasser and Brambles were more upfront in this announcement on January 14 when the former Ford CEO quit due to his role as a senior partner in the JP Morgan private equity arm which had just bought a business that was a major Brambles supplier.

Similarly, when it was reported in the press that Nick Greiner was taking an interest in online retailer dstore, then Coles Myer chairman Stan Wallis was all over him, extracting an almost instantaneous resignation from the former NSW Premier.

The same should be happening with Burrows, but if there isn't a result soon, then we'll throw it open for the shareholders to decide.