Inside your ABC: How Justin Milne underestimated Michelle Guthrie

Outside the ABC board room at the public broadcaster’s Ultimo headquarters there is a wall dedicated to former managing directors.

They are remembered in a series of black-and-white photographs, all head shots, lined up in two neat rows. There is a grinning Mark Scott, a defiant Jonathan Shier and a focused Russell Balding all staring down from a stately height. After this week, another photo will join the display but it will look decidedly out of place among this gallery of middle-aged white men. Not only will Michelle Guthrie be the first woman to adorn the MD wall, she is also the first Chinese-Australian.

As Guthrie joked in late July, singing along to the famous Sesame Street tune: “one of these things is not like the other.”

The 2016 appointment of a female, part-Chinese, former Google executive, was supposed to deliver the ABC to the modern era. But by the end of this week, not only had Guthrie lost her job but ABC chairman Justin Milne had also been relegated to the history books and the broadcaster was embroiled in a political interference scandal. So what went wrong?

A myriad of explanations were put forward for Guthrie’s unceremonious sacking on Monday morning. Among them; low staff morale, budget problems, absenteeism and poor government relations. But while these may have played a part, Guthrie’s ouster mid-way through her five-year term at the helm of the ABC came down to an old-fashioned power struggle between the managing director and her chairman.

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In the end, Milne, a close friend to former prime minister Malcolm Turnbull, underestimated Guthrie. After failing to convince her to resign quietly and accept the board’s decision in return for some flattering farewell speeches and a sizeable payout, he sacked her and appeared to have emerged victorious from the boardroom stoush.

Guthrie fights back

On Monday, he looked to have the backing of directors, management and staff, with Four Corners executive producer Sally Neighbour, who had fallen out with Guthrie over the program’s budget, declaring on Twitter it was an “excellent decision”. However, Guthrie still refused to go quietly.

Instead, she lawyered up, employing the services of high-powered Sydney barrister Kate Eastman. She also hired media manager Andrew Butcher, a former spokesman for Rupert Murdoch and old friend from her days at News Corporation.

David Rowe

“She’s a tough operator and she has to get her reputation back,” says a Guthrie supporter, who prefers to stay anonymous.

“It’s her name. She still has a career ahead of her.”

Quentin Dempster, a former staff-elected director of the ABC board, said “it has become obvious that Justin Milne and his directors … have misjudged Michelle Guthrie.”

She “is a street fighter,” he said. “And now there’s blood everywhere.”

David Rowe

Last Friday, Guthrie handed ABC directors a 12-page document addressing the concerns that had been raised regarding her leadership style. There was frustration in the boardroom at this latest turn as the previous day, it appeared the 53-year old might do a deal and resign. Guthrie’s last-ditch effort to save her job, at least for another year, failed as the directors, including former Seven Network chief financial officer Peter Lewis and Minerals Council of Australia chair Vanessa Guthrie (no relation), were not persuaded. Even one of Guthrie’s early supporters, Kirstin Ferguson, a former Air Force officer who has just co-written a book on women’s shared clout, supported the decision to fire Guthrie.

“By that time, they just wanted her gone,” said one source with knowledge of the events.

Milne in the spotlight

However, after she was fired, Guthrie’s dossier made its way into the public domain and unleashed what Milne later described as a “firestorm”, forcing him to step down.

On Wednesday ABC staff walked out of the broadcaster's Sydney HQ over Justin Milne email's to former managing director ...
On Wednesday ABC staff walked out of the broadcaster’s Sydney HQ over Justin Milne email’s to former managing director Michelle Guthrie telling her to sack senior ABC reporter Emma Alberici.

David Porter

In the document, Guthrie defended her travel to Singapore, where her husband, chef Darren Farr, is based, pointing out it was to attend board meetings at the telecommunications company StarHub and the trips had been signed off by the ABC. She also argued the dramatic deterioration in staff morale – a survey showed 83 per cent of ABC employees had no faith in the broadcaster’s leadership – was to be expected as she was part way through a transformation strategy that had involved hundreds of job cuts and a significant business restructure. But it was the case she made around the criticism of her handling of complaints from politicians about ABC reporters, which generated the most interest and wrong-footed Milne and the other directors.

Those close to Guthrie say she was under pressure from the board to be tougher on reporters, including economics correspondent Emma Alberici and political editor Andrew Probyn, who had been the subject of a series of complaints from Turnbull and Communications Minister Mitch Fifield.

However, Guthrie hit back in the dossier insisting the ABC could not bow to pressure from politicians. She objected to an email reportedly sent to her from Milne in May demanding she “get rid of” Alberici and a phone conversation in June during which the chairman insisted she fire or, as he is alleged to have put it, “shoot” Probyn. Guthrie was reportedly told if she was not tougher on these journalists, she would put at risk the future of the ABC and in particular Milne’s pet digital transformation initiative, dubbed “Project Jetstream”. This plan to digitise the ABC’s vast archives on a giant iView platform will take years to build and cost an estimated half a billion dollars, requiring an additional funding injection from the government and Milne was focused on making the case for it in Canberra. Any perceived bias or inaccuracies in ABC reporting, would only frustrate these efforts, Guthrie was told.

Tables turned

David Rowe

On Wednesday, when the exchanges first came to light in a series of media reports, triggering calls for Milne to resign, Guthrie was photographed having lunch at Sydney restaurant Rockpool, wearing a bright red cardigan.

Just a few days earlier, she had come under fire for not doing enough to defend the ABC and its staff. Now, the pressure was on Milne to explain himself.

But as it turned out, he couldn’t. Following the launch of two government inquiries into whether there was any editorial interference and walk-out threats from staff, Milne finally resigned on Thursday. Ferguson has since been appointed acting chair.

“It’s clearly not a good thing for everybody to be trying to do their job with this kind of firestorm going on,” Milne told Leigh Sales on ABC’s 7.30 Report.

In New York, on the sidelines of a UN meeting, Turnbull, meanwhile, was forced to deny he had demanded any staff changes. He and Milne had been friends for a long time, since their days working together at OzEmail during the dotcom boom.

“The bottom line is I’ve never called for anyone to be fired; my concern had been the accuracy and impartiality of reporting,” he told journalists.

It was a spectacular turning of the tables. In less than a week, the debate shifted from Guthrie’s poor performance as managing director to Milne’s apparent breach of editorial independence and his own leadership style, including the use of the term “chicks” to describe women and referring to Guthrie as “the missus” at public events. Milne said he doesn’t remember doing the latter and he used the term “chicks” to “relax” people and never in a denigrating way.

Milne’s defenders

Former ABC chairman Justin Milne returns to his home in Sydney on Thursday after resigning.
Former ABC chairman Justin Milne returns to his home in Sydney on Thursday after resigning.

AAP

Ziggy Switkowski, who chairs the board of government-owned NBN, of which Milne is a director, says Milne was a “person of real integrity”. Switkowski has known Milne since he left OzEmail and came to work at Telstra in 2002, and insisted he had “never seen in him anything other than a very ethical approach to business”.

“People like him around the board table because he has opinions and is not afraid to express them,” says Switkowski.

Another director, who worked closely with Milne, said he was “very assertive,” “ran a fast board meeting” and could be “quite cutting”. They also said he was a “bloke’s bloke” who used colloquialisms deliberately, in a provocative way.

Milne denied that anyone from the government had “ever rung me and told me what to do in relation to the ABC” but at the same time, he told Sales “you can’t go around irritating the person who’s going to give you funding again and again if it’s over matters about accuracy and impartiality”.

It’s not the first time the ABC has been caught up in a political interference scandal. During the first Gulf War, then prime minister Bob Hawke was outraged at the ABC coverage and its use of a critical analyst, which nearly led to the sacking of presenter Geraldine Doogue until the head of news and current affairs Peter Manning pushed back. Later on, Jonathan Shier, who led the ABC for a brief and controversial period from 2000, was said to be on a mission to remove Kerry O’Brien from The 7.30 Report. And former ABC chairman Donald McDonald, close friend to John Howard, attracted criticism after the board cancelled publication of Chris Masters’ book on Alan Jones. Under a different publisher, the book went on to become a best seller.

“Something like this happens about once a decade,” says Manning, now an adjunct professor of journalism at the University of Technology, Sydney.

However, he says the antagonism from the government toward the ABC had intensified under Tony Abbott and Turnbull.

“The complaints have come fast and furious,” he says. “It just so happened Guthrie and Milne came at a time when there was this persistent aggression and culture of complaint about everything the ABC did.”

David Rowe

Guthrie’s failings

While Guthrie appears to have protected staff from direct interference – both Probyn and Alberici still have their jobs – she was regarded as ineffective in Canberra. It didn’t help that her immediate predecessor, Mark Scott, had been an extremely effective public advocate for the ABC.

Guthrie, in comparison, gave some lacklustre performances in front of Senate Estimates and was heavily criticised for not turning up to a hearing in May this year, right after the ABC sustained a funding cut. At the time Guthrie was attending the graduation ceremony for her eldest daughter, Bella, at New York University’s Shanghai campus and this absence had been explained and approved in advance.

Still, “she performed extremely badly when she went to Canberra and her role is to defend the corporation and its budget,” says Manning.

This was one of two main objections to Guthrie among staff, according to Manning, with the other being a lack of appreciation for, and knowledge of, the craft of turning content into programs.

Guthrie also put people offside with her decision to downgrade the legal department in the organisational structure so that it no longer reported to the managing director’s office and she was derided for introducing a superficial recognition system in which staff were rewarded with postcards featuring a character called Larry.

On the positive side, Guthrie boosted money and positions for the ABC’s regional offices and pushed for funding to be directed away from administration toward content. But staff engagement was still low and so in August the board approached Guthrie about resigning.

By this stage, one insider says the relationship between Guthrie and Milne was “toxic.”

Project Jetstream tensions

At the heart of their disagreement was Project Jetstream. Milne believed Guthrie wasn’t taking it seriously enough. For her part, Guthrie had no problem with the idea but she was sceptical about whether the government would grant extra funding and thought the focus should be on lifting the budget freeze that had been put in place to ensure the ABC continued to produce distinctive content.

In her parting statement on Monday, Guthrie made this clear. “It is the content produced by the ABC that is of primary importance to Australians, with the technology used to deliver that content a distant second,” she said.

In his exit interview on 7.30, Milne countered: “the ABC does have to walk straight up to and stare in the face this modernisation question. The ABC in 10 years’ time will be very different from the ABC we have today.”

For now, the ABC is without an MD and its board is in disarray as the position of the directors, who were informed about Milne’s interventions and appeared not to act, is under a cloud.

Former ABC chairman Maurice Newman says there is “no quick fix” for the broadcaster, pointing to a breakdown in communication between the board and management and confusion over strategy.

“If this was a public company, the receivers would be in,” he says.

A more optimistic view is that the ABC emerges from this week in a stronger position with politicians and the public focused on the importance of its strength and wellbeing.

“The survival of an independent, adequately funded ABC (and SBS) will now be a major federal election issue,” says Dempster.

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