The entire board of James Packer’s Crown Resorts should resign over the issue of licensing for the casino, corporate governance experts say.
A fierce report on Crown, tabled in NSW Parliament on Tuesday, has sparked a week of boardroom bloodletting in the company, with three directors so far resigned and at least one expected to follow suit.
Investigation Into Crown Resorts
Guardian Australia can also state that the Australian Securities and Investments Commission is looking into the report, by former judge Patricia Bergin, to consider whether it raises issues related to directors’ duties and other aspects of company law.
“Like other agencies, Asic will look into the Bergin report with interest,” a spokesman said.
Resignations
Andrew Demetriou, a former Australian Football League chief executive, resigned from the Crown boards and subsidiary company that runs the group’s Melbourne casino on Thursday night.
This follows the resignation on Wednesday of two directors who served on Crown’s board as nominees for Packer’s private investment firm Consolidated Press Holdings, which owns about 36% of the group.
Another director, former advertiser Harold Mitchell, may have resigned shortly after being asked by a Victorian casino authority why he should stay on board. This follows the court finding that he had violated his role as director of Tennis Australia in connection with negotiations for a TV rights agreement involving the Australian Open.
Crown chief executive Ken Barton on Friday was in talks with the company about his future after the Victorian Commission for Gambling Regulation questioned his suitability to stay, and the chairman of the NSW casino regulator said on the radio he should leave.
Investigation Into Crown Resorts
Barton and Demetriou were heavily criticized in Tuesday’s report, which followed an investigation submitted by the NSW Independent Liquor and Gaming Authority. An investigation, conducted by Bergin, found that Crown was not eligible for a license to operate a new casino in 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 and then saying he didn’t.
In a statement, Demetriou said: “I believe the comments made against me in this report are incorrect and inappropriate and I will defend my dignity at every opportunity.”
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 also expressed their belief in Conan’s ability to lead the Crown in its efforts to qualify for a Sydney license.
What Are The Experts Saying?
But Warren Staples, a University of Melbourne lecturer who specializes in corporate governance, said the entire board, including Coonan, should resign.
“I think it is very difficult to determine whether there are any members of that board who should continue to lead the organization,” he said.
Andrew Linden, a researcher in corporate governance at RMIT, said the entire board should resign because “boards are collegial bodies, they’re body corporates, and 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 company’s management was the “legal role” of the board.
“They can hand over the responsibilities to the management, delegate them to other people, but ultimately take care of that.”
Former Victorian premier Jeff Kennett, who was in power in the early days of Crown Melbourne’s operation, said on Twitter that Coonan should resign.
“She must accept responsibility for her own failings and is not a fit and proper person to remain on the Board let alone lead the rebuild,” he said.
The crown declined to comment.
