Channel Seven scandal shows company culture needs rehabilitation

Seven wouldn’t be the first to have uncovered the misuse of company funds. But good disclosure hygiene means that these should not have been kept secret.

The Nine masthead expose said: “Three Sunrise staff members … allegedly utilised the ‘contra’ benefits provided to Seven under the sponsorship agreements with Qantas and Accor, for … personal gain.”

It is fair to say that the television industry – not just Seven – is more prone to controversy than most. But it is also fair to say that Seven has had more than its fair share of ethical, governance or cultural failings.

This masthead and Nine Network are owned by Nine Entertainment, which is Seven Network’s major competitor.

Viewed across the wider spectrum of listed companies, Seven has demonstrated a pattern of concerning judgement calls, which arguably began in 2016, when the then Seven chief executive Tim Worner was embroiled in a high-profile scandal with executive assistant Amber Harrison.

Most chief executives would not have survived. Public company boards would have sacrificed an executive who had allegedly taken drugs and had an affair with a member of staff.

Former CEO Tim Worner was embroiled in a high-profile scandal in 2016.Credit: Louie Douvis

Shareholders would have demanded such an outcome. But Stokes, who controls Seven West Media through Seven Group Holdings, backed Worner, who he considered something of a rainmaker, and in doing so, ignored the public calls for his dismissal.

More recently, Stokes financially supported Ben Roberts-Smith, a former SAS commander who lost his high-profile defamation case against Nine over its expose of his alleged war crimes, and will pay millions of dollars to cover Nine’s legal bills.

Both these decisions are considered to be captain’s calls, made by Stokes while his legal lieutenant Bruce McWilliam rode shotgun.

Stokes’ support of Worner and Roberts-Smith have been described as decisions around loyalty.

Both McWilliam and the current chief executive, James Warburton, will soon be leaving Seven – but not in response to the recent scandals.

Indeed, Warburton is credited for overhauling the company and putting it on a more secure financial footing.

McWilliam, who has been a close ally of Stokes during his 21 years with Seven, will leave to concentrate on his media advisory and property portfolio.

Their departures are unlikely to change Seven’s culture.