More pressure to reduce Murdoch family's influence
NEWS CORP has now attracted the public displeasure of at least five shareholder groups and advisory firms ahead of its annual general meeting this month, one of which wants Rupert Murdoch off the board, and all of which have concerns about a board stacked with deferential directors.
NEWS CORP has now attracted the public displeasure of at least five shareholder groups and advisory firms ahead of its annual general meeting this month, one of which wants Rupert Murdoch off the board, and all of which have concerns about a board stacked with deferential directors.The advisory firm Glass Lewis told US investors on Friday to vote against the re-election of James and Lachlan Murdoch, as well as long-term directors David DeVoe, Andrew Knight and Arthur Suskind, plus Natalie Bancroft, whose family sold The Wall Street Journal to News Corp.The note, reported by Adnews, said shareholders should "carefully consider the nature of the relationship" each director had with the Murdoch family - which controls the company through a two-class share structure giving it 40 per cent of the votes from just 12 per cent of the shares - so the company could have a board with "proper independence levels and strong oversight".The firm said last month that "applying rigorous oversight has not been a strength of the News Corp board" and it had "consistently failed to achieve standards of good governance due to the board's historical deference".News Corp has won some support by launching a popular $5 billion share buy-back, but the board composition remains contentious. The Local Authority Pension Fund Forum in Britain has joined the criticism, telling its members that James Murdoch's presence on the board was "causing significant reputational damage" to the company, and his re-election should be opposed.Unlike the other groups, it wants his father removed from the board, as Rupert Murdoch remains both the chairman and chief executive in contravention of Australian Stock Exchange guidelines. The forum chairman, Ian Greenwood, said in a statement: "We believe that to secure News Corp's long-term future such reform is necessary."Last month, the Australian Council of Superannuation Investors made the same recommendation as Glass Lewis against the Murdoch brothers and four other directors, while the advisory firm Pension Investment Research Consultants in Britain has made similar recommendations.In July, the largest US public pension fund, California Public Employees' Retirement System, called the two-class share structure "a corruption of the governance system" and said it was considering its options for forcing reform.The strength of the Murdoch family's hold on the voting shares make the moves unlikely to succeed, but ACSI believes a message of change needs to sent to the board, and opposition at the October 21 annual general meeting in Los Angeles would do that.