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October 15, 2008

The discreet charm of non-executive directors: Sharp hires at The Guardian and The Telegraph

By Peter Kirwan MM blog

What do non-executives get paid for?

Actually, the money isn’t great (at least not by the standards of Masters Of Universe).

The official version is that non-executives act as neutral voices, mediating between management teams and shareholders. Occasionally, they are called upon to mediate between chairman and chief executives, too.

If that sounds a bit like working as a counselor at Relate, the marriage guidance service, think again. Non-executives also have some serious (fiduciary, in the jargon) responsibilities. In extremis, neglecting these responsibilties can get them prosecuted.

As I say, that’s the official version. In many ways, the unofficial version is much more interesting — particularly at non-quoted companies, where there’s less pressure to appoint directors who are deeply acceptable as guardians of the City’s interests.

Away from the public markets, copper-bottomed presentability in the City doesn’t matter so much as a gilt-edged contact book.

Nothing wrong with that at all. It’s the stuff from which deals are made. In particular, today brought two stunning examples of the genre.

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First up, Telegraph Media Group appointed Lauren Twohill, Google’s European marketing boss, as non-executive director.

Twohill has worked at Google for the past six years — long enough to assimilate the DNA of a company that lies at the heart of the web economy.

Meanwhile, over at the Guardian Media Group, in the wake of Paul Myners’ departure, the company has appointed venture capitalist Judy Gibbons as a non-executive director.

Like Twohill, Gibbons is unusual — in the sense that she’s a female Brit with extensive high-level experience of Silicon Valley.

But Gibbons’ track record in the tech industry — all 25 years of it — is deeper and wider. After stints at Hewlett-Packard and Apple, she switched allegiance to Microsoft, playing a big role in the development of MSN.

Next, Gibbons ascended to tech exec heaven — that’s to say, she became a partner at one of Silicon Valley’s largest and most respected venture capital firms, Accel Partners. (Its portfolio of investments include Facebook and a bunch of established and well-respected deep-tech companies.)

No doubt Gibbons will play a big role in advising Carolyn McCall on how to invest the tens of millions that GMG has banked from the part-sale of Auto Trader. (There’s a rather large “investment fund” waiting to be spent — although some of it may already have been blown on the £30m acquisition of Paid Content).

We know less about Telegraph Media Group’s investment plans. Have the Barclays ponied up cash for a 2.0 spending spree? Given the desperation of so many start-ups, they could do a lot worse. No doubt Ms Twohill will help the Barclays to spend what’s available.

If anything, the corollary these appointments is even more intriguing.

At Wapping, can we expect James Murdoch to tear down the walls that traditionally separate News Corp’s operating units — and bring in some digital expertise from his dad’s empire? You’d hope so. But there’s little sign of it.

If anything, the recent promotion of two insiders to take over Anne Spackman’s role as editor of Times Online points to a continuing preference for autarky.

What about Daily Mail & General Trust? This is a company that has excelled in snapping up high-margin B2B and database publishers. But its top table visibly lacks a digital star. (Charles Dunstone of Carphone Warehouse is a retailer at heart, and a superb one. But he doesn’t quite make the cut in tech terms IMHO.)

Endearingly, five of DMGT’s non-execs appear to be over 70 years of age.

At Independent News & Media, there’s no News Corp-style pool of talent to call upon. Here, the roster of non-execs resembles a procession of stuffed shirts, old mates with Irish surnames and the odd bloke who has some expertise in international relations. Plus Baroness Jay.

As at DMGT, this is a boardroom policy minted in the 1980s. The appointment of Twohill and Gibbons elsewhere will steadily increase the pressure on the O’Reillys — and the Rothermeres — to confront the recent arrival of the 21st century.

And what of Trinity Mirror? Sly Bailey has made some interesting-looking digital acquisitions. But have you looked at Trinity’s line-up non-execs lately? To say the least, it lacks digital oomph.

There’s Gary Hoffman (a vice-chairman at Barclays, who seems well-versed in the credit card business); Laura Wade-Gery (an ex-management consultant and investment banker who runs; Kathleen O’Donovan (former beancounter-in-chief at industrial widget company Invensys); and Jane Lighting (former CEO of Five).

DMGT, IN&M and Trinity Mirror need to get their backsides in gear. Their non-quoted competitors have just raised the ante. Significantly.

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