- »Experts Call for Crown’s Entire Board to Step Aside
Experts Call for Crown’s Entire Board to Step Aside
A scathing report into Crown Resorts has led to corporate governance experts expecting Crown’s entire board to resign.
The Guardian reports that the report, tabled in New South Wales parliament last Tuesday, has prompted a week of boardroom bloodletting at the company, with three directors so far resigning and at least one more set to follow.
The Australian Securities and Investments Commission is said to be looking into the report by former judge Patricia Bergin, to examine whether it raises issues related to directors’ duties and other parts of company law.
“Like other agencies, ASIC will be considering the Bergin report with interest,” a spokesman said.
Andrew Demetriou, the former Australian Football League chief executive, resigned from the boards of Crown and a subsidiary company that runs the group’s Melbourne casino on Thursday night.
This followed the resignations on Wednesday of two directors who served on Crown’s board as nominees of Packer’s private investment company Consolidated Press Holdings, which owns about 36 per cent of the group.
Another director, former adman Harold Mitchell, is likely to resign soon after being asked by the Victorian casino regulator why he should continue on the board.
This followed a court finding that he breached his duties as a director of Tennis Australia in relation to negotiations for a TV rights deal covering the Australian Open.
The chief executive of Crown, Ken Barton, was on Friday in discussions with the company about his future after the Victorian Commission for Gambling Regulation questioned his suitability to remain and the chairman of the NSW casino regulator said on radio that he should go.
Bergin hits out at Barton and Demetriou, praises Coonan
Barton and Demetriou were heavily criticised in Tuesday’s report, which found Crown was not fit to hold a licence to operate a new casino at Barangaroo, Sydney.
Bergin said Barton behaved “appallingly” by giving a misleading answer to a shareholder question at the 2019 annual meeting about whether Packer was getting special briefings from Crown.
She also criticised Demetriou for reading from notes while giving evidence at the inquiry, then saying he didn’t.
In a statement, Demetrious said: “I believe the comments directed at me in the report are unfair and unjust and I will defend my reputation at every opportunity.”
Barton has not responded to requests for comment.
Bergin gave Crown Resorts chair Helen Coonan a glowing review, saying the chair’s evidence to the inquiry “demonstrates that her character, honesty and integrity has not been and could not be called into question.”
Packer and the NSW Independent Liquor and Gaming Authority have also expressed their faith in Coonan’s ability to lead Crown in its efforts to become suitable to retain the Sydney licence.
But Warren Staples, a lecturer at the University of Melbourne who specialises in corporate governance, said the entire board, including Coonan, should resign.
“I think it’s very difficult to decide that there are members of the board that should go on and lead the organisation,” he said.
Andrew Linden, a researcher on corporate governance at RMIT, said the entire board should resign because “boards are collegial bodies, they’re body corporates, they constitute the legal entity,” of a company.
“So it’s somewhat illogical for the commissioner to single out a particular director and say they can stay,” he said.
He said the management of the company is the board’s legal role.
“They may delegate tasks to executives, who delegate them to other people, but they are ultimately responsible.”