Investors pile on pressure against Murdoch
Editor ©RapidTVNews | 10-10-2011 Rupert Murdoch and his business empire have received another blow in their annus horribiliswith groups of News Corp shareholders demanding a shake-up in the composition of the company’s board.
Only days after The Local Authority Pension Fund Forum (LAPFF) issued a voting alert to its members regarding the re-election of James Murdoch to head News Corp, investors shareholder adviser Glass Lewis recommended that investors vote against the re-election of both of Rupert Murdoch's sons at the News Corp annual meeting next week.
As an indication of the respective financial clout of the two organisations, LAPFF’s 54 members have combined assets of £100 billion whilst Glass Lewis advises institutions reported to hold just under £10 trillion worth of investments.
LAPFF’s main bone of contention is that the News Corp board must take responsibility for the hacking scandal unearthed earlier in 2011 and asserts that that this would be best achieved by a change to its existing membership and structure. Furthermore it believes that James Murdoch’s continued presence on the News Corp board is causing significant reputational damage to the company and is no longer in shareholders’ interest. The Forum has therefore recommended that its members oppose James Murdoch’s election.
On 7 October, Glass Lewis recommended that investors use their votes to prevent six current News Corp directors—most notably Lachlan and James Murdoch—from serving further terms. In a report, the company advised investors to "carefully consider the nature of the relationship each director has with the company and with its controlling shareholder, the Murdoch family, in order to establish a board with proper independence levels and strong oversight".
The move by the two advisory bodies adds to further recent financial pressure on Rupert Murdoch. In September 2011, News Corp shareholders including Amalgamated Bank, trustee for various LongView investment funds; the New Orleans Employees' Retirement System; and Central Laborers Pension Fund, filed charges against the media giant's senior management and board of directors in a complaint to the Delaware Court of Chancery.