Statement from the chair
The events of 2010/11 proved the value of the financial backing and unique ownership structure that form the bedrock of GMG’s support for the Guardian.
Our portfolio of investments provided the backdrop against which the Guardian was able to continue to produce brilliant independent journalism, precisely as envisaged by the Scott Trust – despite intense financial challenges across the industry and a 10.3% reduction in revenue at our core business Guardian News & Media (GNM).
Nevertheless, while the Guardian benefits from the financial strength of GMG’s portfolio, under the oversight of the Trust, it does not operate in a vacuum. The forces of change continue to sweep through the industry, irrespective of short-term variations in the advertising market.
The Guardian – like other parts of GMG – has demonstrated great ingenuity and vision in adapting to the digital age and attracting a new, global readership. Its current initiative to develop its US operation, building on an already sizeable audience in the States, is a prime example of this. However, digital revenues, while growing steadily, do not fully offset declining print revenues. This is the challenge facing GNM and news organisations across the world.
In this context, the Board is very pleased that our new chief executive officer, Andrew Miller, has reshaped and streamlined the management structure to facilitate maximum focus on GNM. There is now a clear distinction, strategically and in terms of operational management, between GNM as the core business and the portfolio of assets and investments that are designed to provide for its future.
None of this diminishes in any way the importance of the portfolio companies, nor their achievements in the year under review. The radio and property businesses performed well in difficult markets, outperforming their peers. The companies that we jointly own with Apax Partners, Trader Media Group (TMG) and Emap, are repositories of value for the Group. TMG remains an exemplar of how to manage the transition from print to digital, posting record profits in 2010/11, while Emap is well positioned to take advantage of economic recovery. Such assets, along with our successful investment fund, provide a high level of reassurance for the future.
I have already mentioned Andrew Miller as our new chief executive officer. We were delighted to be able to confirm Andrew in the role, following a rigorous executive search process. Andrew had already made a major contribution to GMG as chief financial officer, first of TMG and then of the Group. We were fortunate to have such an outstanding candidate to step into the role and he has made an excellent start.
Andrew was succeeded as chief financial officer by Darren Singer, who has in-depth experience of the media sector. He joined us in April 2011 from Group M, a WPP company, having previously worked for BSkyB and the BBC. We are very pleased to have him on board.
Tim Brooks left the Company when the post of managing director at GNM became redundant, following the changes to the senior management structure of GMG and GNM. We would like to thank Tim for his resolute leadership of GNM and the valuable contribution he made in over four years with the Group.
Senior independent director John Bartle stood down in December 2010 after nine years on the Board. John was a true stalwart of GMG, which has benefited immensely from his insight, experience and wise counsel. The Board is very grateful for everything he has done for the Group and the Guardian. We are very fortunate indeed that Nick Backhouse has taken on the role of senior independent director.
Simon Fox joined the Board as an independent director in May 2010, and has been an excellent member of the team in his first year with GMG.
Following a review of the executive remuneration strategy in 2009/10, GMG’s remuneration committee has adopted a set of principles to guide policy, details of which can be found in the directors’ remuneration report. An important policy change is that no member of the Senior Executive Compensation Plan will receive a payment for achievement of personal objectives unless Company financial targets are first achieved. This change came into effect at the beginning of the 2011/12 financial year.
The Board of GMG is very grateful for the contribution and support of people right across the Group, whether in the core business or in the portfolio companies. People who work for GMG show a remarkable level of commitment, often in demanding circumstances. Change is always difficult and the months and years ahead will be as challenging as anything we have experienced so far. Nonetheless, the talent and dedication of our people, our strong core values and the strength of the assets in our portfolio mean we can be confident about our ability to meet our remit from the Scott Trust and, therefore, the future of the Guardian.
Dame Amelia Fawcett DBE
Chair, Guardian Media Group