LEIGH SALES, PRESENTER: It's fair to say the ABC has never seen a week like this.

Welcome to 7.30.

What was meant to be a precision strike against the managing director, Michelle Guthrie, has turned into a bloodbath, with the ABC chairman now also a casualty, and questions remaining about the judgement of the entire board.

At the heart of this week's crisis is the insistence of the public and of ABC staff that the network's journalism be scrupulously independent and free from political interference — or even the appearance of it.

After Michelle Guthrie's sacking on Monday came leaking of emails and conversations at the network's most senior levels. Then the screws started turning on the chairman.

At 10:00 this morning, Justin Milne agreed to an interview with 7.30. At 11:00, he walked into this studio and within seconds announced he had resigned.

Justin Milne, thank you for coming in.

JUSTIN MILNE, FORMER ABC CHAIRMAN: Pleasure.

LEIGH SALES: Will you be continuing as ABC chairman?

JUSTIN MILNE: No, Leigh, I won't.

The board rang me this morning and asked to have a meeting without me, to which I of course agreed.

And at that meeting, I understand they decided to suggest to me that I might stand aside while these various investigations that have been proposed take place.

But I said, well, I think actually I should resign, because clearly there is a lot of pressure on the organisation, and as always, my interests, my aim has been to look after the interests of the corporation.

And it's clearly not a good thing for everybody to be trying to do their job with this kind of firestorm going on, so I wanted to provide a release valve.

LEIGH SALES: Is your resignation an admission you failed to safeguard the editorial independence of the ABC?

JUSTIN MILNE: Absolutely 100 per cent not.

In fact, I feel that the interests of the ABC have always been uppermost in my mind — and just to sort of get it on the record for you — is that there was absolutely no interference in the independence of the ABC by the Government.

Nobody from the Government has ever rung me and told me what to do in relation to the ABC. Nobody ever told me to hire anybody, fire anybody or do anything else. They absolutely didn't.

I mean, I know that's the sort of narrative that's been running in the papers, but that absolutely never happened.

LEIGH SALES: Well, let me walk you through some of the detail of what has been around this week.

Did you email the managing director Michelle Guthrie and tell her to get rid of economics correspondent Emma Alberici because the Government hates her?

JUSTIN MILNE: Let me explain the context around there, is that the role of the chairman...

LEIGH SALES: Is that — sorry to interrupt, but just — it's just probably good for the context of the discussion to have a straight yes or no. Did you actually do that?

JUSTIN MILNE: I'm going to come to that.

LEIGH SALES: Okay.

JUSTIN MILNE: So the role of the chairman, as really defined by the act, is to look after the corporation and look after the sort of longevity and survival of the corporation, and in particular to look after and be responsible for editorial independence and accuracy.

When there is an issue of editorial independence and accuracy, it's appropriate for the chair to be involved. That's the chair's job. It's defined.

So, yes, we had conversations about that, and we had conversations with multiple people, and those are sort of swirling conversations where essentially, the managers and the chair at that particular time were trying to decide, "What shall we do here?"

LEIGH SALES: In that email, though, you didn't say that you had concerns about her fairness and accuracy — you said, "because the Government hates her."

JUSTIN MILNE: I have never sent an email to Michelle Guthrie, or anybody else, which says "You must sack Emma Alberici," or Andrew Probyn, or anybody else.

This is a piece of an email which I actually haven't seen, but nevertheless, it's a piece of an email that's taken out of a context in a conversation which was a confidential conversation, and a conversation which you'd expect should be had.

What do we do about this? That was what that conversation was, but I've never provided instructions that anybody should be sacked.

LEIGH SALES: How did you come to understand that the Government hated Alberici?

JUSTIN MILNE: I think the whole of the Australian population understood that the Government was not keen.

LEIGH SALES: Did somebody ring you specifically about that?

JUSTIN MILNE: No. Definitely not.

LEIGH SALES: What do you mean by — one of the reported parts of that email included the statement: "We need to save the ABC, not Emma. There's no guarantee they, the Coalition, will lose the next election."

What did you mean by that?

JUSTIN MILNE: I think what I meant by that, really, was that — and it's important — is that, as I said, the role of the chair and the board is to ensure the longevity of the corporation.

Now, this organisation, like all other media organisations, is under significant threat, really, from the Google, Facebooks, etc, and from the fact that technology is changing.

So, we at the ABC — the ABC has to build digital infrastructure for the future. That's going to cost a lot of money, my estimation about half a billion dollars.

And the ABC has started a dialogue with the Government and with the department to put a business case together to get half a billion dollars of funding up-front, which we will spend over two or three years, the benefits of which will come towards the end of a 10-year period.

So, the board has been very active on this project, called Jetstream, to describe and to prosecute a program of modernising the ABC and building the digital infrastructure, which it will need if it's to be broadcasting content to Australians in 10 years' time.

LEIGH SALES: But you seem to have linked the possibility of that occurring with Emma Alberici's continuing presence on the ABC?

JUSTIN MILNE: Not quite so much, Emma.

But I mean, I think it would be naive not to understand that the relationship between the Government and the ABC is a difficult one, because on the one hand, the Government provides the funding. On the other hand, the ABC is supposed to be independent of the guy who is providing the funding.

But you can't — you can't be — you can't go around irritating the person who is going to give you funding again and again and again, if it's over matters of accuracy and impartiality.

And in fact, what happened in those — in that particular area, was that we, the ABC, found that we were not accurate, nor impartial.

LEIGH SALES: How often did ministers or the prime minister get in touch with you regarding complaints about ABC reporting?

JUSTIN MILNE: Truthfully, not very often.

I know that the media has characterised me as being a big mate of the prime minister, but whilst Malcolm Turnbull was prime minister, I think I might have seen him half a dozen times, or something like that. Not very often.

And I can tell you, he was not on the phone to me, saying, "I want you to do this," or "I want you to do that," or "I think this," or "I think that." All of Malcolm's views about the ABC were well-ventilated in the press and in the Parliament.

LEIGH SALES: When you said that they occasionally did ring you, when you had those conversations, what was the nature of them?

JUSTIN MILNE: They were about things like Jetstream, really. I mean, Jetstream is the principal conversation that, on behalf of the board, I put on the agenda with the Government.

LEIGH SALES: Is it accurate that Malcolm Turnbull rang you in a fury over some of Emma Alberici's reporting?

JUSTIN MILNE: No.

LEIGH SALES: When politicians would ring you to complain about ABC reporting, how did you respond?

JUSTIN MILNE: Well, they didn't ring me. Truthfully, they didn't ring me to complain. If they had complaints, they lodged their complaints.

It's well known that Minister Fifield has lodged a number of complaints, and that's appropriate. He's allowed to.

LEIGH SALES: Did — I know you said that you never said that anyone needed to be sacked, just for

the interests of clarity, because there's been a lot of reporting around this week — did you have a conversation with Michelle Guthrie at any stage about your view that she needed to get rid of the ABC's political editor, Andrew Probyn, and the words you used were, "you have to shoot him"?

JUSTIN MILNE: No, I don't remember saying that at all, but what I certainly would have done is had a conversation with not only Michelle, but with other members of the leadership team, about what I'll call the Probyn issue.

So, Andrew Probyn also found himself in hot water with the Government. We investigated that, and made certain the ABC got to certain positions on that.

But again, it's just not possible to imagine a world in which the chair, or a board member, is not involved in matters which go to the heart of their obligations under the legislation. They have to be.

LEIGH SALES: Is that the role of the chair, though, or is that not the role of the managing director?

JUSTIN MILNE: Well, it's the role of the managing director, clearly, to execute. The managing director is an executive, there to execute stuff.

But the role of the chair is to be involved in those discussions and to help to ensure that the interests of the corporation are looked after, and in an environment where the board was losing its confidence in the managing director, that made it even more necessary for me to be involved.

LEIGH SALES: By raising things, like the availability of Jetstream funding and the Government's view of the ABC in the context of these editorial discussions, did you, as the chairman, breach a wall — breach your role, I guess — to be the wall between politicians wanting to influence the reporting of the ABC and the ABC's editorial independence?

JUSTIN MILNE: No. Nobody has told me that I'm supposed to be a wall. I think, more what I'm likely to be is a conduit.

You know, the Government is a fundamentally important — fundamentally important — stakeholder in the ABC, and it's necessary, and I think it's the role of the board to be a conduit so that the left hand knows what the right hand is doing and we understand how people are feeling about things.

That doesn't mean — and people leap to a conclusion there and say, "Well, there you go — independence breached," — but I don't believe that's the case at all. I believe it's unthinkable that a chair would not be involved.

LEIGH SALES: Why did the board sack Michelle Guthrie?

JUSTIN MILNE: We've ventilated that pretty well, and it's because we did lose our confidence in her ability to lead the corporation.

LEIGH SALES: Why?

JUSTIN MILNE: Well, there's a lot of small pieces, and I don't want to go to those small pieces, because each of those small pieces is not the reason, in a slightly complicated and difficult-to-explain way.

Those small pieces led us to the conclusion that she was the wrong leader for this organisation. She had lost the faith of the folks. She was not leading the corporation in the way that we felt that the corporation should be led.

LEIGH SALES: But what was it about her leadership style that you thought was not what you wanted?

JUSTIN MILNE: We've — I think I've discussed that already, on the record, and I don't really propose to go there again.

So, I don't want to make this a process of criticising Michelle Guthrie. Michelle did many good things while she was at the corporation, but the board assesses the performance of a CEO.

It's their job to do that — probably their most important job — and the board made that assessment over a long period of time, and came to the conclusion that she wasn't the right leader for us going forward.

LEIGH SALES: But Michelle Guthrie, in her own statement, says that it's not really clear to her what she did wrong. The Australian taxpayer funds the ABC; don't they deserve a better explanation than, "Well, we just felt that she wasn't delivering what we wanted," which is essentially what you've offered?

JUSTIN MILNE: Well, I feel disinclined to provide any more than that, even though people, when there's a media storm like this, would love to have juicy details.

LEIGH SALES: Is it because of your legal action?

JUSTIN MILNE: But I — it's not — I'm not going to provide it.

And of course, there are two things at stake here. One is that she's — Ms Guthrie has indicated that she may become litigious, so one needs to be careful in those circumstances.

And the other is I don't want to damage Michelle in any way at all. I don't want to sit here and ventilate all the things that we didn't like about her leadership. In the end, there were many things that led us to the view that we needed a different leader.

LEIGH SALES: When did you, or the board, first make Michelle Guthrie aware of your concerns about her performance?

JUSTIN MILNE: I'm afraid I can't tell you the exact date, but I'm going to say four to six weeks ago, with a very serious meeting, and a very serious letter that we provided her.

LEIGH SALES: What did the letter specify you wanted to see done differently?

JUSTIN MILNE: It specified a range of different issues in relation to her leadership, which I'm not prepared to go into, I'm sorry.

LEIGH SALES: And then when did the board, after that meeting, then actively discuss her removal?

JUSTIN MILNE: On multiple occasions, and we asked Michelle to come back to us with a plan to address the issues that we discussed, and which she did — and the board decided that the way she proposed to address those issues was insufficient.

LEIGH SALES: How effectively was Michelle Guthrie managing the ABC's budget?

JUSTIN MILNE: You're taking me to — and, you know, good on you for trying — but you're taking me to specifics, and I really don't want to go there. I just don't think it's appropriate, and I don't want to be damaging and I don't want to create litigation.

The ABC's budget is in fine shape. Numbers are shortly to be released, and they've been checked off by the auditor — by an independent auditor, by the ANOP — and you know, there's nothing wrong with our budget at all. It's in great shape.

LEIGH SALES: There was a controversial staff morale initiative that began, called The Larry Project. Was the board aware of that initiative before it started?

JUSTIN MILNE: No.

LEIGH SALES: And what did you think of it?

JUSTIN MILNE: Not much.

LEIGH SALES: Is it accurate that the board was concerned that Michelle Guthrie was missing in action too much of the time?

LEIGH SALES: Michelle has got a busy job, and she was in many different places at many different times, and I think some of the staff formed the view that she was a hard person to find.

Did she do anything inappropriate? Definitely not.

LEIGH SALES: Did it concern you that she missed an appearance before a Senate estimates hearing?

JUSTIN MILNE: That was a concern; it was unfortunate. But you know, the problem here is that there are a

multiplicity of things, which ultimately — as I tried to explain — add up to, "Is this the right leader for us?"

LEIGH SALES: Let me ask you about a tabloid newspaper report this morning, to give you a chance to address it: did you refer to Michelle Guthrie as "the missus"?

JUSTIN MILNE: I really don't think I did. I don't call people "the missus", and I have zero recollection of ever doing that. I don't know why I would. I mean, I don't think of her as "the missus" at all.

LEIGH SALES: Do you call female staff "chicks", or "babes", or anything of that nature?

JUSTIN MILNE: I've used the word — not "babes", but I've used the word "chicks" — in relation to not female staff, but to friends and people that I know, and I think I do that with people that I like.

I don't do it all the time, but I think I do it to sort of try to relax people. I try to be friendly with people, but I certainly don't use that word in a derisive or denigrating way.

And if it causes — if it's caused offence to people, then I do apologise for that, because that's not my intention at all. It's colloquial, it's kind of matey. That's the context in which I use it, and which I'm going to I guess probably you do as well. So many people do.

LEIGH SALES: The ABC now is entering a period of some serious instability because it's lost its managing director and the chairman of its board.

What do you think are the most significant challenges facing the ABC at this juncture?

JUSTIN MILNE: Well, I think the ABC needs to keep calm and carry on, and that's the reason I'm resigning: to provide a safety valve or a pressure release valve to allow them to do that, because I think this kind of ridiculous media storm around me and Michelle is obviously not helpful.

So, first thing is keep calm and carry on. Second thing is do the great stuff that you do, because the ABC is a national treasure. It's been one for 83 years. It will be one, I hope, for another 83 years.

But the ABC does have to walk straight up to and stare in the face this modernisation question. The ABC in 10 years' time will be very different from the ABC we have today.

This ABC that we're sitting in to isn't that different from the ABC in the 1980s, but the ABC that we're going to find in 10 years will be a very different beast.

LEIGH SALES: Do you accept that the revelations of the past week have damaged the ABC's reputation, and cast a shadow over its editorial independence from Government?

JUSTIN MILNE: No, I don't think so. In fact, there's a view that I could take, to say, in some ways — and you would think this is a strange thing for me to say — in some ways there's something good about this.

This is democracy in action. This is debate in action — and what have we been debating? We've been debating whether the ABC is independent from Government or not. And I'll tell you it is.

And then we've been debating at a slightly more arcane level, what's the role of a chairman — in particular, a chairman of the ABC and the board — in relation to the executive? And I think that those are both good debates to have.

In the end, despite all of these allegations and excitement, the board and the chair were never directed by Government, number one. Number two is: the management was never directed by the board, and the proof of that, just to observe, is just that both of the people whom I'm supposed to have demanded that they be sacked — which I didn't — are both still employed.

In fact, what happened was: meetings were had; discussions were had; a plan was come up with. Findings were made by Alan Sunderland and the editorial group. Small disciplinary matters were attended to — I'm trying to find the right words there — and we've all moved on.

And both of the people in question remain employed, and truthfully, I have great respect for them, especially Andrew Probyn.

LEIGH SALES: Justin Milne, thank you very much.

JUSTIN MILNE: Thank you very much.