Carlton boss Michael Green has been ousted as chairman designate of a new merged ITV group, following a bitter battle with shareholders.
Michael Green: Ousted by his own firm's shareholders
Carlton's board said it had accepted shareholder arguments that an independent, non-executive chairman should be appointed from outside Carlton or Granada, its merger partner.
The ousting of Mr Green was instigated by a group of disgruntled investors who own big stakes in both Carlton and Granada.
They argued that Mr Green was the wrong man to be ITV chairman, both because of his past record and because he intended to be a hands-on executive chairman.
Possible successors are thought to include Carlton director Sir Brian Pitman, who was formerly in charge at Lloyds TSB, and former Lazards banker John Nelson.
Others being mentioned as possible candidates include former Vodafone boss Sir Christopher Gent, chairman of Allied Domecq Gerry Robinson and outgoing Independent Television Commission chief Patricia Hodgson.
Carlton has said Mr Green will stay on as Carlton chairman for now, playing "a full and active role" over the next few months as the two media groups work on completing their merger.
Mr Green's chances of becoming ITV chairman appeared to disappear when he lost the support of merger partner Granada, following shareholder pressure.
Granada's board on Tuesday morning backed calls for a new, non-executive ITV chairman to be appointed from outside both firms.
The shareholders - led by several large fund management firms - rejected a compromise offer from Carlton's board on Monday that would have seen Mr Green stay on but relinquish an executive role after 18 months.
Granada's board said it was determined that ITV should go forward with the full support of its shareholders and wished to remove the uncertainty as swiftly as possible.
"It is now clear to the board of Granada that there is a substantial body of opinion, amongst shareholders of both companies, in favour of the appointment of an independent, non executive Chairman of ITV plc," it said.
Carlton had earlier defended Mr Green, saying it believed both Carlton and Granada needed to be represented as the two firms prepared to merge to run the ITV network.
It added that a management shake-up in the midst of sensitive merger negotiations with the Office of Fair Trading would be highly destabilising and could put at risk some of the benefits of the merger.
The shareholders are reported to have become disillusioned with Mr Green's management style, following his handling of the £1.2bn ITV Digital debacle.
They were also concerned by Mr Green's recent comment that he would only retire at 80 and planned to work full-time as chairman of ITV.
The ultimatum from shareholders came less than a month after the Carlton boss celebrated government approval for the £4bn merger with Granada to create a single ITV company.
Mr Green's counterpart at Granada, Charles Allen, will become chief executive of the merged group.
"Granada are the bigger company and you have to believe that
without Michael Green this no longer looks like a merger but a
takeover by Granada," said Henk Potts, analyst at Barclays Stockbrokers.
I've met Michael Green on a number of occasions, and while I could see he wasn't always an easy man to deal with I always found him to be extremely passionate about the business he's in, and so it's a shame he's being pushed out by people who are more interested in seeing the business run by accountants.
Tony M, UK
Companies are OWNED by their shareholders - they are perfectly entitled therefore to decide who runs it on their behalf and can object to how its being run if they feel the need.
David Clarke, UK
Saying that companies should be run by their shareholders is like saying that the country should be run by the voters.
However, bosses must always be accountable to shareholders, who have ample chance to change them at Annual or Extraordinary General Meetings if they are not satisfied.
I hope the directors remember that they will each be up for re-election eventually, and at the mercy of the shareholders.
Anthony Gilbert, England
Green has presided over the collapse of ITV digital, a decline in the quality of output and ad revenues; and he still believes he is the best man for the job. It is clear that the only thing keeping him there is a management style which holds those close to him in line.
James Carr - Jones, UK
Green has made too many strategic errors, and has cost his companies billions. He is now a loser who can't let go the reins. It is time he retired.
Kerry, London, England
City-based fund managers could spend their time better by trying to improve their own frequently mediocre performances.
Richard Corbett, UK
Granada's Charles Allen also needs to take some blame in this fiasco...Allen should do the honourable thing and resign as well so that the new company can start afresh
Stephen Kelly, England
Of course shareholders, who own the company, should exercise their rights. In fact there should be far more action on their part to show the bosses that the fat cat days are over
Brian Levy, UK
Michael Green is from the old school of management. He operates his business in an autocratic, but fair way. The shareholders are correct to exercise their knowledge in some cases. However, Michael Green is a hard act to follow. Let us see if they can find better. I doubt it.
As for Corbett's comments, he needs a lesson in Fund Management. If there is substantial institutional ownership in a company, then they need to exercise their voting power. If they think the company would be better off with someone else at the helm, they actually have a fiduciary responsibility to make this clear to other shareholders.
Shareholders own the company, pay the managers' wages, and can of course sack them when they fail to perform satisfactorily. Green's responsibility for the ITV Digital debacle should have seen him gone long ago.
It irritates the hell out of me that shareholders are powerful enough to oust the boss when they want to, but seem powerless to act against bosses who award themselves huge pay rises. Maybe the government should think about stepping in to restrict the overall influence shareholders have, and more importantly cap the level of bonuses bosses award themselves!
It is a pity that Green is being kicked out. It looks like Fidelity is a proxy for a US company. ITV needs someone who knows and is passionate about television. I bet the new chairman will be an accountant who knows nothing about television. This is a sting operation.
D Smith, UK
It is about time that the large shareholders used their strength to make changes in the running of plc companies. The current power of the Directors club is just a licence to print money. Nearly all non executive directors are executive directors on other companies boards, so they look after each other first and the shareholders second? As I understand, it's the role of the non executives to protect and look after the shareholders interests not the executive directors interests. The current 'directors' club' makes the Masons look like beginners, and I'm a conservative voter.
Martyn Buckle, England
It appears that the city want to get rid of Michael Green because it will be easier to sell ITV off to an American TV company if he is not around.
Is this really good news for shareholders, and most importantly, is it good news for the future of British TV is ITV is swallowed up by a US company ? Don't think for one moment that all US TV is "Friends" and "Frasier". For every West Wing, there are 200 shows that are dropped before the series is finished !
Nich S, UK
Jamie, UK, Said - "Saying that companies should be run by their shareholders is like saying that the country should be run by the voters."
Did you miss the California recall? The application of majority view in respect to the choice of leader by stakeholders whether they be shareholders or voters is the essence of democracy.