News Corp shareholders turn on Murdoch
Editor | 04-10-2012
The fallout from the News Of The World phone hacking scandal rumbles on with shareholders and advisory groups backing resolutions seeking the appointment of an independent chair at the now defunct newspaper’s parent News Corp.
Leading shareholders and investor advisory services, including US-based Christian Brothers Investment Services (CBIS) and members of the Local Authority Pension Fund Forum (LAPFF), have backed an initiative seeking the appointment of an independent chair at News Corp which they regard as a necessary step toward rebuilding shareholder trust and protecting long-term shareholder value in a firm where approximately two-fifths of voting shares are tied to the Murdoch family. Proxy voting advisory service Glass Lewis has also recommended that shareholders vote in favour of the resolution.
#The motion will be voted on at the Rupert Murdoch-led company’s AGM in Los Angeles on 16 October. Investors supporting the resolution include Hermes Equity Ownership Services (Hermes EOS) who manages assets on behalf of more than 170 clients with $38.8 billion assets under management.
Commented Hans Hirt, Global Head of Corporate Engagement at Hermes EOS: “While we acknowledge the recent board changes made by the company, News Corp has still not sufficiently addressed the significant shareholder concerns about its board structure and corporate culture highlighted at last year’s annual meeting. The time is right for the company to appoint an independent chair in order to rebuild trust, and ensure that the interests of all investors are more properly represented.”
The move is the latest in shareholder hostility to the Murdoch family’s influence in News Corp. Hermes noted that in July 18 investors—including Legal & General Investment Management, Railpen, The Co-operative Asset Management, AP4 and Mercy Investment Services—with more than £1 billion worth in assets under management and 13.4 million News Corp Class A shares wrote to the media giant’s board expressing their support.
Added Ian Greenwood, Chairman of Local Authority Pension Fund Forum:“Whilst we recognise the efforts the company has made to clear up the mess left by the hacking scandal, we continue to believe that News Corp and its shareholders would benefit from the appointment of an independent chair. The clear sense we are getting is that major News Corp shareholders agree with our analysis and share our desire for the company to commit to meaningful reform.”