RUPERT MURDOCH'S two sons, James and Lachlan, should be voted off the News Corp board along with four others, according to the superannuation industry's advisory body dismayed at the phone hacking scandal and dominance of the mogul's family to the detriment of other shareholders.
The Australian Council of Superannuation Investors, an organisation of 42 super funds managing $250 billion in assets, yesterday asked its members with News Corp shares to recommend opposing the re-election of the Murdoch brothers at next month's annual general meeting.
It wants the pair to go, along with three directors who have served for two decades each and Natalie Bancroft, the opera singer member of the Bancroft family, which sold Dow Jones and The Wall Street Journal to News Corp.
The call comes after a British advisory firm, PIRC, told pension funds there to oppose James Murdoch's re-election and suitability to succeed his father.
The chief executive of ACSI, Ann Byrne, said investors around the world had previously called for an independent director to be chairman, rather than Rupert Murdoch continue as chairman and chief executive, contrary to Australian Stock Exchange guidelines.
They want family and long-serving directors replaced with a majority of "credible, skilled" independents, but progress had been too slow and the AGM was an opportunity to "convey their clear view" for reform. "Because of the lack of sufficient oversight and risk management, investors need to send a message," she said.
The council concedes it will likely amount to a message only, as it knows that the Murdoch family control of 40 per cent of voting shares - while owning only 12 per cent of the total shareholding - make the call unlikely to succeed in any casualties among the six nominees it opposes.
The phone hacking scandal in Britain and the purchase of television production company Shine, from Mr Murdoch's daugh-ter Elisabeth for #415 million ($656 million), were factors in their decision.
The move was not a comment on individual directors, but on News Corp corporate governance as a whole, and came after speaking with the board's current independent directors, according to Ms Byrne.
The responsibility for "setting the ethical tone" rested with the board, she said, but it was "impractical" to recommend the whole board be dismissed. "When we do have such a prominent shareholding, we rely much more on the independent directors," she said.
The council wanted News Corp to have a majority of independent directors rather than its assessment of just five from 15 after the AGM.
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Frequently Asked Questions about this Article…
What is the Australian Council of Superannuation Investors (ACSI) asking News Corp shareholders to do at the AGM?
ACSI is urging its members who hold News Corp shares to oppose the re-election of James and Lachlan Murdoch and four other nominees at next month’s annual general meeting, as a way to push for corporate governance change at News Corp.
Why does ACSI want James and Lachlan Murdoch voted off the News Corp board?
ACSI cites concerns about the phone hacking scandal in Britain, the dominance of the Murdoch family on the board to the detriment of other shareholders, and recent related transactions (including the $415 million purchase of Shine from Rupert Murdoch’s daughter) as reasons to oppose the Murdoch brothers’ re-election.
Who does ACSI represent and how big are the assets behind its call on News Corp?
ACSI is the Australian Council of Superannuation Investors, an organisation of 42 super funds that collectively manage about $250 billion in assets, and it asked those members with News Corp shares to recommend opposing the specified directors.
Which specific News Corp directors does ACSI want replaced?
ACSI wants the two Murdoch sons removed, three long‑serving directors who have each served about two decades, and Natalie Bancroft — a member of the Bancroft family that sold Dow Jones and The Wall Street Journal to News Corp.
Is ACSI’s push likely to remove the Murdoch nominees from the News Corp board?
ACSI acknowledges its campaign will probably be more of a message than a victory: the Murdoch family controls 40% of voting shares despite owning about 12% of total shareholding, making it unlikely the opposed nominees will be unseated.
What corporate governance changes is ACSI seeking at News Corp?
ACSI wants News Corp to replace family and long‑serving directors with a majority of ‘credible, skilled’ independent directors and for the company to have an independent chairman rather than combining the chairman and CEO roles in one person, in line with Australian Stock Exchange guidance.
How has the phone hacking scandal influenced investor calls for change at News Corp?
The phone hacking scandal in Britain is one of the key factors prompting investors like ACSI to call for stronger oversight and risk management at News Corp, arguing the board is responsible for setting the company’s ethical tone.
Have other advisory firms weighed in on News Corp director re‑elections?
Yes — the British advisory firm PIRC recommended that pension funds there oppose James Murdoch’s re‑election and question his suitability to succeed his father, a view that helped inform ACSI’s position.
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