Angry shareholders have labelled infighting among the board of Fairfax Media Ltd "appalling" and new chairman Roger Corbett admits he is embarrassed by the episode.
Shareholder and former federal Labor senator Chris Schacht earned a round of applause at the newspaper publisher's annual general meeting on Tuesday when he described the feuding as reminiscent of "killing fields".
In September, board members and major shareholders John B Fairfax and son Nicholas sparked a public boardroom stoush by voicing their dissatisfaction with former chairman Ron Walker's tenure at the company.
They said their private company Marinya Media would not support Mr Walker's re-election to the board, and despite the support of Mr Corbett and other board members, Mr Walker eventually announced he would stand down.
Mr Walker accused the Fairfaxes of inappropriate behaviour and harming shareholder value.
He did not attend the meeting in Sydney on Tuesday.
"One group of directors abusing another director, under any definition, is an appalling performance that has affected our share price, affected the reputation of the company, made us a laughing stock as an international media company," Mr Schacht told the meeting.
"The governance performance of this board ... has been appalling."
Outside the meeting Mr Corbett was asked if he could understand shareholder embarrassment over the feud between the Fairfax family and Mr Walker.
"Yes I can, I felt embarrassed myself," he said in response.
Earlier, Mr Corbett told shareholders the board had moved on and would "speak with one voice" in the future.
"It is a matter of the past," he said.
"I think the Fairfaxes and the directors would have wished that maybe there would have been another course of events.
"But the course of events were as they were.
"Were the board at all times happy with that? The answer is no.
"Have the Fairfaxes moved to correct the position? Yes they have."
Shareholders also vented their anger over former chief executive David Kirk's $4.1 million termination payment following his departure in December 2008.
Mr Corbett said Fairfax met its contractual obligations in its final remuneration to Mr Kirk, a former All Black captain, and the terms of the contract were approved by shareholders several years ago.
He would not be drawn on the circumstances of Mr Kirk's departure, simply referring to it as a "mutual understanding".
Chief executive Brian McCarthy said Fairfax's underlying earnings before interest, tax, depreciation and amortisation (EBITDA) in the first four months of the current financial year was down 15 per cent on the same period last year.
However he said advertising revenues were improving each week, with the exception of the financial and employment sectors.
"Generally, each week it improves," Mr McCarthy told reporters after the meeting.
"It has been pretty much across the board and it has been pleasing also in New Zealand, our New Zealand business is coming back as well."
Modest earnings growth is forecast for the second half of the fiscal 2010.
Three external candidates seeking Fairfax board positions were not approved by shareholders, as expected after the company directors recommended a full and complete hiring process be undertaken.
They were former editor-in-chief of The Age Steve Harris, former Financial Review editor Gerard Noonan and journalist Stephen Mayne.
All three candidates will be included in a list of people currently being assessed by the Fairfax board, Mr Corbett said.
"We are working as hard as we can and as quickly as we can," he said.
"We recognise we need to widen the skills of the board in a number of areas, particularly in new media skills."
Appointments are expected to be announced early next year.
Mr McCarthy said Fairfax was yet to come to a final position on the issue of charging for its online content.
Fairfax shares lost 1.5 cents, or 0.91 per cent, to $1.635 on Tuesday.
© 2009 AAP
