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.
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, a 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 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 family that 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.
ACSI chief executive Ann Byrne said investors around the world had previously called for an independent director to be chairman, rather than Rupert Murdoch continue as both 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 the Murdoch family's control of 40 per cent of voting shares - while owning only 12 per cent of the total shareholding - makes the call unlikely to succeed in any casualties among the six nominees it opposes.
The British phone hacking scandal and the purchase of a television production company, Shine, from Mr Murdoch's daughter Elisabeth were factors contributing to its 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.
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.
Frequently Asked Questions about this Article…
Why are investors being urged to vote the Murdoch sons off the News Corp board?
The Australian Council of Superannuation Investors (ACSI) urged members to oppose the re-election of James and Lachlan Murdoch because of concerns about the phone hacking scandal, the dominance of the Murdoch family on the board and perceived weaknesses in News Corp’s corporate governance and oversight.
Who is the Australian Council of Superannuation Investors (ACSI) and why does their view matter to News Corp shareholders?
ACSI is an advisory body representing 42 superannuation funds that manage about $250 billion. Their recommendations matter because they coordinate large institutional shareholders and publicly called on members with News Corp shares to recommend opposing certain board re-elections ahead of the AGM.
Which News Corp directors did ACSI want shareholders to oppose and why those names?
ACSI asked members to oppose the re-election of James and Lachlan Murdoch along with three long‑serving directors (each with about two decades of service) and Natalie Bancroft. The call targeted entrenched family influence and long tenures as part of a broader push for stronger independent oversight.
How did the phone hacking scandal and the Shine acquisition influence investor concerns about News Corp?
The British phone hacking scandal and News Corp’s purchase of TV production company Shine from Elisabeth Murdoch were cited by ACSI as contributing factors to its decision, reinforcing worries about ethical tone, conflicts of interest and weak governance at the group.
What corporate governance changes is ACSI recommending for News Corp?
ACSI wants News Corp to have a majority of credible, skilled independent directors and for the company to move toward an independent chairman instead of having Rupert Murdoch serve as both chairman and chief executive — a setup that goes against Australian Stock Exchange guidance.
Will the ACSI push likely remove the Murdoch nominees from the board?
The council acknowledges its action may be largely symbolic: the Murdoch family controls about 40% of the voting shares (despite owning roughly 12% of total shareholdings), making it unlikely the campaign will succeed in ousting the nominees.
Did any other advisory groups weigh in on James Murdoch’s re-election?
Yes. The British advisory firm PIRC had advised pension funds in the UK to oppose James Murdoch’s re-election and questioned his suitability to succeed his father, which helped inform ACSI’s stance.
How did ACSI describe the board’s responsibility and the purpose of opposing nominees at the AGM?
ACSI said the board is responsible for 'setting the ethical tone' and that the AGM presented an opportunity to 'convey their clear view' that progress toward stronger oversight has been too slow. The move targeted corporate governance as a whole rather than being a personal attack on specific directors.
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