Phorm appoints Norman Lamont as director

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• Executive,
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• Director,
• Interest

Tom Espiner ZDNet.co.uk

Published: 02 Dec 2008 18:30 GMT

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Phorm, a provider of targeted behavioural advertising technology, has announced it has appointed former Conservative chancellor Norman Lamont as a non-executive director.

Lamont was appointed on Monday alongside Kip Meek, chair of the Broadband Stakeholder Group (BSG) and a consultant with Ingenious Consulting, who was also made a non-executive director.

Phorm also appointed Stefan Allesch-Taylor, chief executive of investment bank Fairfax, and Stephen Partridge-Hicks, managing director of investment management company Gordian Knot, as non-executive directors.

The four new appointments were made following the departure of Phorm chief operating officer Virasb Vahidi, along with fellow board members Steven Heyer, David Dorman and Christopher Lawrence. A Phorm spokesperson said they had left due to "differences" with Phorm chief executive Kent Ertugrul over "the management and future direction of the company", but declined to comment further.

Phorm has attracted attention for trials it conducted in 2006 and 2007 with BT, in which it tracked the web-surfing behaviour of users of the internet service provider without their knowledge. Critics have said that the trials contravened UK privacy and data-protection laws. The Information Commissioner's Office has ruled out any action against the companies over these trials, as has the UK government. The European Commission is currently scrutinising the UK government's position regarding the Phorm trials.

The Phorm spokesperson told ZDNet UK that Lamont had been appointed in part because of his understanding of government. "He clearly understands that world," said the spokesperson. "He's got excellent judgement and the broader set of skills necessary to be a member of the board."

Lamont's appointment drew surprise from anti-Phorm campaigner Alexander Hanff. "Lamont was chancellor during the recession in the early '90s," Hanff said. "I found his appointment odd, as it could damage Phorm."

Meek's appointment to the board also raises an issue, according to Hanff. The BSG describes itself as a "neutral forum for organisations across the converging broadband value-chain to discuss and resolve key policy", whereas Phorm has an interest in promoting targeted behavioural advertising, Hanff said. "I can't see how Meek's appointment can't be a conflict of interest," he added.

However, BSG chief executive Antony Walker said that any potential conflicts of interest arising from Meek's appointment to Phorm could be resolved. "If the situation arose where there were potential conflicts of interest, Kip would step back, and I would lead BSG considerations," Walker said. "BSG brings together companies and organisations that quite often have conflicting views."

The BSG chief executive added that it would not be possible to find a suitable candidate to chair the BSG who did not have other interests.

"Finding the right candidate to chair the BSG involves a balancing act of credibility and experience," said Walker. "To take on that leadership role, anybody with that profile will inevitably have other interests. Kip has been open about the [Phorm] appointment."

The Phorm spokesperson told ZDNet UK that the new appointments are not intended to boost Phorm's share price. Phorm saw operating losses of $25.6m (£17.1m) for the six-month period ending on 30 June, 2008. "Each new board member brings his own unique set of skills, but, no, that wouldn't have been a reason," said the spokesperson.

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