The controversial attempt by Jeff Kennett to pole-vault his way onto the board of ASX-listed casino company, Echo Entertainment, demands an immediate response. But it's not the ASX that should be worried: The move is cheap, but legitimate.
Rather it's the high-profile mental health group beyondblue that should move to defend its reputation, not to mention its entitlement to more than $10 million a year in government funding.
The prospect of Kennett straddling the boards of both beyondblue and a substantial gaming company does neither organisation justice. As a range of anti-gambling representatives have pointed out in recent days there are clear links between gambling and depression. Separately, how can Kennett maximise value for shareholders if he is campaigning in any fashion for depressed gamblers?
Kennett, with typical bluster, yesterday brushed off these concerns suggesting that if he were to be "inside the tent" he may have more impact on a company's gambling policy.
Earlier in the week James Packer's Crown group -- a 10% shareholder in Echo Entertainment -- formally requisitioned an extraordinary general meeting of Echo in an attempt to oust the incumbent Echo chairman John Story in favour of Kennett.
Oddly, though James Packer's letter to Echo shareholders advocating the EGM champions the merits of Kennett as chairman, Kennett himself is only talking in public about joining the Echo board as a director -- the discrepancy here may suggest Kennett himself had second thoughts about the entire manoeuvre.
Kennett has done admirable work -- he unquestionably led a successful regime that revived Victoria in the mid-1990s when the state hit rock bottom. Moreover, he has said his work at beyondblue for more than a decade has been the "most important work of my life to date".
All the more reason then he should not jeopardise those achievements now.
Of course, a high profile chairman in the non-profit sector is exceptionally important -- public attention translates to funding, which in turn can finance change programs. No doubt, this is one of the reasons beyondblue is sticking by its chairman.
Similarly, the board stuck by its chairman last year when it was revealed the then chief executive of beyondblue, Dawn O'Neill, had made a written complaint of bullying against Kennett. O'Neill has since resigned.
Remarkably, beyondblue's current chief executive, Kate Carnell, has suggested Kennett as a board member of Echo could advocate on behalf of "the small number of Australians that do have problem gambling".
Kennett should either resign from beyondblue or drop his name from Packer's ticket in the EGM move on Echo Entertainment. You can't be on both sides of the fence.
This article first appeared on Business Spectator.