October 18, 2011 > UK fund manager wants Murdochs off News Corp board
UK fund manager wants Murdochs off News Corp board
By Robert Barr, Associated Press
LONDON (AP), Oct 14 _ A British fund manager on Friday called for Rupert Murdoch to resign as chairman of News Corp. as a step toward restoring trust in the global media company.
The British firm Hermes Equity Ownership Services, which manages more than $140 billion of assets, also called for Murdoch's sons James and Lachlan and affiliated directors to be replaced by what it called ``credible outside directors.''
``News Corp. has not reacted with sufficient urgency to investor concerns about its board composition and corporate culture,'' said Hermes' director, Jennifer Walmisley.
Earlier this week, another group, Institutional Shareholder Services, had urged shareholders to toss out the entire 15-member board at News Corp.'s annual general meeting in Los Angeles on Oct. 21.
Questions about News Corp. governance flared after one of the company's British newspapers, the News of the World tabloid, was shut down amid a scandal over illegal telephone hacking and alleged bribery of U.K. police officers. The scandal has claimed the resignations of several top Murdoch executives, and several former employees have been arrested.
There was further embarrassment for New Corp. this week by reports that the Wall Street Journal Europe had published two articles as part of a deal with a supporter to distribute cut-price copies to students.
Hermes, which represents about one-half of 1 percent of News Corp. shares, said it would not vote next week for the re-election of directors Arthur Siskind and Andrew Knight because of concerns about their independence. Both have been on the board since 1991.
The Murdochs control the company through a family trust that owns 38 percent of voting shares worth $5.1 billion.
Institutional Shareholder Services said the U.K. hacking scandal ``laid bare a striking lack of stewardship and failure of independence by a board whose inability to set a strong tone-at-the-top about unethical business practices has now resulted in enormous costs.''
It also called for shareholders to vote against a pay package that gave Rupert Murdoch a bonus of $12.5 million for the past fiscal year. The vote would not be binding.
News Corp. spokeswoman Teri Everett said the company was working hard to resolve the hacking scandal.
``However ISS' disproportionate focus on these issues is misguided and a disservice to our stockholders,'' she said.
The Local Authority Pension Fund Forum, representing 54 U.K. members with assets of $100 billion, has recommended last month that shareholders vote against re-electing Rupert Murdoch as chairman and James Murdoch to the board.
The Australian Council of Superannuation Investors has called for the elder Murdoch to be replaced by an independent chairman, and for votes against re-electing the Murdoch brothers, as well as Natalie Bancroft, David De Voe, Knight and Siskind.
Ann Byrne, CEO of the Australian group, said there was no hope of mustering majority votes to oust anyone.
``However, in an endeavor to keep pressing for skilled independent directors to join News Corp. and raise the standard of oversight, a clear messages needs to be conveyed to the board,'' she said last month.