11 February 2000
TVNZ MEDIA RELEASE

TVNZ BOARD STANDS BY ITS EXECUTIVES

The Board of TVNZ said today that there has been a perfectly justifiable demand for accountability in the John Hawkesby case.

And there now needs to be a clear understanding of the responsibilities of the Board, the Company’s executive team, the relationship with the Crown as owner of TVNZ and the requirements of the SOE Act and TVNZ’s Statement of Corporate Intent.

The Board, having met again with Rick Ellis and two of his television executives, Shaun Brown and Paul Cutler, said “we are satisfied they were acting in the best interests of the Company, in accordance with the commercial mandate laid out in the SOE Act and the TVNZ Statement of Corporate Intent, and they continue to have the full confidence of the Board.

“The loyalty and ‘passion’ with which television viewers, and for that matter radio listeners, relate to broadcasters is readily observed. Mr Hawkesby had established a reputation, endorsed by numerous awards, as the country’s leading and most popular television news presenter. The decision to hire him was clearly made with this in mind.

“Similarly when, in the opinion of TVNZ, he failed to perform, and when ratings declined, decisive action was taken which again was fully commercially justified.

“The sums of money involved in the award are unquestionably very large and it is for this reason that the Board made a decision to pursue this in the High Court and will continue to pursue every legal avenue to achieve what it believes would be a more equitable outcome.

“TVNZ is a multi-million dollar business which has returned to its shareholder - and therefore the taxpayer - dividends and taxes of $500 million over the past 10 years, with $200 million of that being paid in the last 2 ½ years.

“But TVNZ’s true measure of success is that it is consistently watched by millions of New Zealanders every week. One News continues to be the highest rating programme in New Zealand media history.

“Naturally, we are extremely disappointed that the company’s dealings with Mr Hawkesby turned out as they did. However, the Board is satisfied all decisions were taken on commercially justifiable terms.”

As to its role, the Board said that it was made aware of the executive team’s desire to hire Mr Hawkesby, but it was not involved in the negotiations, nor asked to approve the contract. The broad nature of the contract was advised however, together with the strong commercial recommendation of the television executives to proceed on that basis.

“It is important to make the point that the Company was following established corporate practice which dictated that staff contracts are properly regarded as a management function for which the Board held the executives accountable.

“It is always easy to say with the benefit of hindsight that some things may have been done differently - but this does not detract from the validity of the actions taken by the executive team at the time.”

The Board had identified at an early stage the need to improve standards of procedural accountability within TVNZ.

“It is ironic that Mr Ellis in particular should be the target of this attack given that his appointment as a strong commercially experienced executive was to improve the business practices of the company, a task he has successfully achieved.

“Contracts for news presenters similar to Mr Hawkesby’s will not be replicated. Over the last two years, processes implemented by the human resources department require of all divisions of the company to operate under specific executive procedures. This was not previously the case.”

ENDS

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