PROTEST votes against James Murdoch remaining as chairman of BSkyB have been cast by three US investors, and one of its biggest British shareholders, before this week's annual meeting of the satellite broadcaster.
Top-10 investor Legal&General will vote against Mr Murdoch remaining as chairman of BSkyB after the fund raised concerns about his independence from dominant stakeholder News Corporation.
Joining it are three US investors: the California State Teachers' Retirement System (CalSTRS), the Florida State Board of Administration and the Christian Brothers Investment Services have already lodged votes against Mr Murdoch remaining on the board.
CalSTRS, the largest teachers' retirement fund in the US, with $US146 billion of assets, has voted against all the directors before the annual meeting tomorrow.
Calstrs was among the investors to vote against the re-election of Mr Murdoch to the board of News Corporation at last month's annual meeting, while the CBIS led an unsuccessful campaign for Mr Murdoch's father, Rupert Murdoch, to be stripped of both his roles as chairman and chief executive of News Corporation, which owns almost 40 per cent of BSkyB.
The move will stoke fears at the top of the broadcaster there could be a significant revolt against Mr Murdoch at the meeting. It is believed a vote against the chairman of under 20 per cent would be survivable for Mr Murdoch, but a vote above that would "unsettle the board", according to one person with knowledge of the situation.
Even before the opposition of the funds was disclosed, Mr Murdoch was already under pressure about his role as chairman of BSkyB following the phone-hacking scandal in Britain. A Labour MP, Chris Bryant, intends to attend this week's annual meeting to express his concerns about the corporate governance at the company after he wrote to 40 major shareholders urging them to vote against Mr Murdoch's re-election to the BSkyB board.
BSkyB, though, has mounted a robust defence of its chairman, saying he has "always acted with integrity" during his time at the company. Mr Murdoch was chief executive for four years before moving to the role of chairman in 2007, and he has also won endorsement from other investors, such as Odey Asset Management.
In a recent letter to shareholders, Nicholas Ferguson, deputy chairman and a contact point for shareholders, said: "We have known James for some eight years, and during that time he has always acted with integrity in the eyes of both the board and the senior management. If this was to change, clearly the independent directors would re-evaluate the position."
Frequently Asked Questions about this Article…
Who is James Murdoch and what is his role at BSkyB?
James Murdoch is the chairman of BSkyB. He served as the company’s chief executive for four years before moving to the role of chairman in 2007.
Why are some investors voting against James Murdoch remaining as chairman of BSkyB?
Several investors have cast protest votes over concerns about his independence from the dominant stakeholder, News Corporation, and over corporate governance issues that intensified after the phone‑hacking scandal in Britain.
Which major investors have publicly said they will vote against James Murdoch at the BSkyB annual meeting?
The investors named in the article are Legal & General (a top‑10 investor), and three US investors: the California State Teachers' Retirement System (CalSTRS), the Florida State Board of Administration, and Christian Brothers Investment Services (CBIS).
What is CalSTRS’ stance and background in this dispute?
CalSTRS, the largest teachers’ retirement fund in the US with about $US146 billion of assets, has voted against all the directors before the meeting. It also previously voted against James Murdoch’s re‑election to the News Corporation board.
How is News Corporation connected to BSkyB and why does that matter to investors?
News Corporation owns almost 40% of BSkyB. Investors worry that large ownership by News Corporation could affect the independence of BSkyB’s chairman and the board, which is a key corporate governance concern.
What would a successful protest vote mean for James Murdoch and the BSkyB board?
According to the article, a vote against the chairman of under 20% would be survivable for James Murdoch, but a vote above that level would likely "unsettle the board" and signal a significant revolt among shareholders.
How has BSkyB defended James Murdoch against these protest votes?
BSkyB has robustly defended him, saying he has "always acted with integrity" during his time at the company. Deputy chairman Nicholas Ferguson also wrote to shareholders in support of Murdoch, and some investors such as Odey Asset Management have endorsed him.
What should everyday investors watch for at the BSkyB annual meeting?
Everyday investors should watch the level of protest votes against the chairman and other directors, any statements from major shareholders or the board, and shareholder activism (for example letters or attendance by concerned MPs). Those indicators will show how strongly investors feel about governance and independence issues at BSkyB.
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