Bull in the boardroom: Is this Peter Costello’s final hour in corporate Australia?

Just a few days before Peter Costello shoulder-charged a reporter from The Australian at Canberra Airport, James Packer did something similar to the chairman of Nine Entertainment in the Murdoch broadsheet.

Packer’s shot at Costello was far more premeditated. It had been five years since the billionaire and his former close friend fell out over investigative reporting by the newly merged Nine TV network and the former Fairfax newspapers, The Age and The Sydney Morning Herald, which exposed impropriety, illegality and corruption at Crown casinos.

In 2019, when Nine’s devastating exposé dropped, the chairman had not even given Packer a heads-up that it was coming. This, in the view of shareholder activist Stephen Mayne, is to Costello’s considerable credit.

“He was a non-interventionist chair and he let the journalists get on with what they did. And the best example is how [investigative reporter] Nick McKenzie destroyed his mate – his ex-mate – James Packer’s Crown business,” he says.

It’s not hard to understand that Packer might have seen things differently, as Nine, the media company he inherited from his father and then sold to go into the gambling and resorts business, went after his new empire.

It’s also not hard to understand why, five years down the track, Packer might want to serve a little cold vengeance.

Multiple women had come forward with claims that Darren Wick, Nine’s former head of the television current affairs and news division – who resigned on March 15 with a reported million-dollar payout – had allegedly groped them and made unwanted sexual advances. Some believed their careers had suffered as a result of having spurned those advances.

According to a report in The Australian on May 20, an allegation by at least one woman had been “discussed at the most senior echelons of Nine, including by the seven-person board, which is chaired by former federal treasurer Peter Costello. Nine’s chief executive officer Mike Sneesby also sits on the board.”

The story noted the parties had signed “non-disclosure agreements pertaining to the matter”. It also said the paper was “not suggesting that Wick did behave inappropriately to a female member of staff; it is simply noting that a formal complaint was made against him”.

From there, the story snowballed. Not only the Murdoch media but also Nine’s own reporters turned up a dozen or more anonymous complainants about Wick’s alleged behaviour. Pointed questions were being asked: about how many more cases there might be, about the use of non-disclosures, about the broader culture in Nine’s TV and current affairs unit, and about why, if the board and particularly Sneesby had known about an alleged pattern of behaviour purportedly extending back years, nothing had been done sooner.

On June 2, The Australian and Packer opened up a second front, suggesting Costello had shown himself to be a dud in his 11 years on the Nine board and eight years as chairman. His time as chair had not been good for shareholders, said Packer.

The Nine share price was lower now than when he became chair. It had fallen 10 per cent since the Wick allegations became public.

The story also dusted off the old, damaging Packer claims that Costello had deceived the Nine board in relation to his $300,000 role as a “secret Crown lobbyist” in 2011. Interestingly, Packer professed regard for Sneesby, who had to that point appeared to be in greater danger of losing his job over the Wick matter. The intent of the story was clearly to turn more of the heat on the Nine chairman.

Not that Packer was expecting Costello – who had retired from his other big job, leading the government’s $200 billion-plus investment vehicle, the Future Fund, in February – to quit.

“I think being chairman of Nine is all he has left and he will try and keep the job for as long as he can,” the billionaire told the newspaper.

Indeed, Costello might have survived if, as was widely speculated, Sneesby was sacrificed. A few days later, however, that changed. On June 6, a reporter from The Australian waylaid Costello at Canberra Airport, peppering him with questions while recording on his phone. He ended up lying on the floor, protesting that Costello had assaulted him.

The former treasurer later insisted: “I walked past him, he walked back into an advertising placard and he fell over. I did not strike him … if he’s upset about that, I’m sorry, but I did not strike him.”

The video belied his claim, however, as did a couple of witnesses. It appeared to show Costello, a very large man, dropping a shoulder into the reporter and then, instead of offering a hand up, laughing and walking away.

Last weekend, Costello’s tenure as the head of Nine ended. So, in all likelihood, did the 66-year-old’s time in corporate life.

As one former editor of a Nine paper tells The Saturday Paper: “Once you go out like this, it’s hard to get another public company gig.

“He might have to wait until the Libs get back into power. Be ambassador to Tonga or something,” he says, chortling.

Another former senior executive reckons Costello is done in the country, when it comes to corporate appointments.

“Board culture in Australia is very conservative and low profile,” he says, noting that even before the shoulder-charge incident the former Liberal federal treasurer was widely regarded as being too politically partisan, overbearing, “difficult” and “tricky”.

“He’d have to go overseas, I reckon. He’s got no friends left here. He’s friendless.”

His departure is not much mourned at Nine, as The Sydney Morning Herald’s editorial said in as many words on Monday, under the headline “Peter Costello had to go. And thank goodness he has”.

“Indeed,” wrote SMH editor Bevan Shields, “the Herald believes his tenure is a case study in why ex-politicians often do not make good company directors.” He cited Costello’s recent public criticism of Treasurer Jim Chalmers, noting the chair of a major media organisation needed to have a constructive relationship with the government of the day.

“His presence on the Nine board was also a source of concern for loyal subscribers suspicious of the influence a former Liberal treasurer would have over the company’s mastheads and source of frustration for editorial staff who had to frequently reassure readers and stakeholders that our independence remained a guiding principle of how we operate.”

A former editor makes the same points to The Saturday Paper: Costello never sought to downplay his partisanship, and that infected public perceptions of the media organisation he led.

They cite examples. At the last election he turned up at a polling booth to support the foundering campaign of Josh Frydenberg, posing for a smiling photograph with Frydenberg, which the then treasurer posted on social media.

Then there was last month’s “in conversation” appearance with Tim Wilson – who lost the Melbourne seat of Goldstein for the Liberals at the 2022 election – at an event organised by the Financial Services Council, to critique Labor’s budget.

Even more concerning was the incident in 2019 when Nine held a $10,000-a-head fundraiser for the Liberal Party, attended by Scott Morrison and other senior ministers, hosted by then chief executive Hugh Marks.

Journalists at The Sydney Morning Herald, The Age and The Australian Financial Review were outraged. Nine subsequently acknowledged the event was a “mistake” and assured staff it would not happen again.

Such indicators of political partisanship at Nine’s most senior levels, says the former editor, “just made it impossible for us. Readers and subscribers were apt to see bias in our reporting where there was none.”

In Stephen Mayne’s view, Costello “just didn’t seem to get obvious governance stuff” that went with his job. “I stood up at the first Nine AGM and had a go at him for being a regular guest on The Bolt Report on Channel Ten. Like, when you’re on the board of Nine, you can’t keep being a commentator appearing on rival networks.”

That said, Mayne makes a distinction between Costello’s bumptious personality and obvious partisanship and his performance on the Nine board. Under him, Mayne says, Nine did well.

“The decision to set up a joint venture with Fairfax to create [the streaming service] Stan, which happened while he was on the board, was an inspired decision. I think the merger with Fairfax to get radio, television and print together was a good match. It’s made Nine strong enough to resist all those winds that are coming at old media.

“It’s worth $2.3 billion today. It’s solid, it will not go broke, whereas Ten is going broke, has gone broke. Seven West shares are at 18 cents. And News Corp, it’s just propped up by REA, which is worth more than the rest of News Corp combined.

“And most importantly,” says Mayne, “he was a non-interventionist chair. Costello was not reaching in doing Murdoch- or Stokes-style interventions.”

Several editors and senior executives who worked under Costello tell a similar story: with just one exception, he had little contact with the editors of the fiercely independent former Fairfax mastheads.

On occasion, says one source in a position to know, Costello “grumbled” about the progressive bent of The Age and The Sydney Morning Herald. “But did he ever sort of lose his shit or start trying to order people around? No.”

The exception was The Australian Financial Review. A former senior attendee at some of Costello’s visits there attests, however, that he did not attempt to influence its editorial direction or its reporting. He didn’t really have to, given the AFR is conservative and pro-business, in keeping with its audience.

“Anyway,” says the source, “whatever was happening, he quickly warmed to his favourite subject, which is himself.”

The former Fairfax papers are arguably less vulnerable to editorial interference than they have been at other points over recent decades, for example in the early 1990s, under the highly interventionist regime of Canadian media mogul Conrad Black, or in the early 2000s, when former Liberal Party grandee Ron Walker was chairman.

One reason, says Mayne, is the major shareholders these days are institutional investors, more concerned with revenue than ideology. Another, explains a former senior executive, is that “audience data is so precise now that media companies have a much better idea of where their audiences sit”.

“So you have to be true to your base to a certain extent, while pursuing the truth and challenging and raising different ideas.”

Conservatives, he says, often “don’t understand … the economic value of the masthead lies, firstly, in their independence, but, secondly, in their ability to relate to their audiences”.

In any case, the Nine–Fairfax merger allowed the combined entity to range across multiple ideologies and demographics, from the shock jocks of commercial radio  to the tabloid TV of A Current Affair to the journalism of The Sydney Morning Herald and The Age to the specialist business reporting of the AFR.

In fact, given the quality reporting of the print mastheads now is amplified by the reach of TV, Mayne says, this period since the Nine–Fairfax merger “has been a golden age for impactful investigative journalism”.

This is somewhat a tribute to Costello. But, says a source, as has been the case throughout his career, his achievements have been undermined by his personality.

Peter Costello first came to public prominence almost four decades ago, as a young lawyer acting for the owners of a small confectionary company, Dollar Sweets, in an unprecedented case in the civil courts against a union for losses it sustained through industrial action. Although the ultimate settlement was small, it had major ramifications, being the first time a union had been forced to pay common law damages to an employer.

It made Costello’s name as a union-buster and helped propel him into federal politics. In 1990 he won the blue-ribbon Melbourne Liberal seat of Higgins. He rose quickly through the ranks. Just four years after entering parliament he became deputy leader of the party and, when the Coalition won in 1996, treasurer in the Howard government. He held the role for the entire 11 years under Howard.

No doubt he was lucky to be treasurer during a period of economic stability and booming revenue. In the view of Mayne and many economists, however, he is too seldom given credit for the establishment in 2006 of the Future Fund, to invest for the future provision of public servants’ previously unfunded superannuation liabilities.

Back then, in the latter stages of the Coalition government, Howard was more inclined, in Mayne’s words, to see the budget surplus “pissed up against the wall” in an attempt to buy votes.

“So one of his tactics to lock the money away was to set up a Future Fund. And successive governments have trusted it to be the investor of choice for various other different funds that were set up. And now it’s sitting on $230 billion,” says Mayne.

At the time the Future Fund was set up, most attention was focused on whether Costello would challenge Howard for the leadership. Famously, in 2005 he briefed senior journalists that he would “destroy” Howard if he did not relinquish the leadership, only to subsequently disavow it. They did not write the story, but for the rest of Howard’s term the media was obsessed with whether Costello would work up the courage to challenge. He didn’t.

After the election of the Rudd government in 2007, he might have led the opposition, spared his party several years of leadership turmoil, and spared Australia from Tony Abbott. Instead, he walked away.

In November 2009 he was lured by Labor with a job on the Future Fund board. Some believe the new government offered the job to get Costello out of politics, because they saw him as a more formidable potential Coalition leader than any of the alternatives.

Controversy followed, as he came into conflict with the board’s chair, David Gonski. In 2013 Gonski quit and Costello was made chair. Says one who saw the way he operated at Nine: “He would be the worst person to have on a board, unless he was the chairman, because he would have to be the dominant figure in the room.”

Under his stewardship, the fund did very well, its investments significantly outperforming the general market. In spite of this, note several of those interviewed for this piece, Costello was not sought out for more board appointments – other than by Nine.

Stephen Mayne suggests the reason is people just don’t trust him, and the shoulder charge at Canberra Airport exemplifies why.

“As someone who wants to like Peter Costello, my biggest disappointment is when he lies even in the face of the obvious.”

His great parliamentary foe, then prime minister Paul Keating, described what he saw in Costello’s character 30 years ago, in typically brutal fashion. Costello, he said, had “all the attributes of a dog, except loyalty”.

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