News Corp under pressure on dual Murdoch roles
New pressures arise to separate the posts of chairman and chief executive of News Corp
News Corp chief executive Rupert Murdoch, still coping with a phone-hacking scandal that erupted at the company's British papers last year, faces renewed calls from shareholders to step down as chairman.
Investors have mounted a campaign to separate the chairman and chief executive roles, which are both held by Murdoch, to increase accountability. They were to push shareholders to vote for the proposal at last night's annual meeting in Los Angeles.
While efforts to split the two jobs were unsuccessful at last year's meeting and not limited to News Corp, Murdoch's handling of the scandal gives fresh ammunition to proponents such as Christian Brothers Investment.
"An independent voice is needed, and Rupert is certainly not independent," said Julie Tanner, director of socially responsible investing for Christian Brothers, a backer of the proposal.
News Corp, based in New York, is embroiled in multiple police investigations for hacking into mobile phones and computers, as well as bribing public officials. British authorities also are considering whether to bring corporate charges against News Corp's board for the alleged crimes. At least 60 people have been arrested since police began the probes last year.
In an October 11 post on Twitter, Murdoch said he was busy preparing for yesterday's meeting. "Signs pretty peaceful, but any shareholders with complaints should take profits and sell!" he said.
"Mandating a separation of the positions of chairman and CEO would weaken the company's current leadership structure," the News Corp board said last month. "The proposal would deprive the board of the valuable flexibility to exercise its business judgment in selecting the individual best suited to serve as chairman in the future."
Christian Brothers, which invests about US$4 billion for largely Catholic institutions, has been a vocal opponent of Murdoch's governance. Tanner filed the proposal to separate the key positions earlier this year, garnering the support of at least 18 investor groups holding more than 13.5 million shares.
"There's been a lack of responsiveness by the board to this scandal," she said. "The company is at risk where a scandal like this could happen again without having very clear and strong oversight."