Murdoch should step down as chairman
Hermes Equity Ownership Services said it will withhold support for all three Murdochs on the media group’s board
By Daniel Mather | CFO UK | Published 15:31, 14 October 11
The time is right for Rupert Murdoch to step down as chairman of News Corporation and for a new independent replacement to be appointed, according to one of the media conglomerate's investors.
Pension fund investor Hermes Equity Ownership Services said on Friday that it intends to withhold its support for the three Murdochs on the News Corp board, namely Rupert and his two sons James and Lachlan, at an upcoming AGM.
Hermes made clear that the phone-hacking scandal involving the group’s British newspaper subsidiary News International had prompted it to enhance its scrutiny of governance and boardroom composition at the business.
“News Corp has not reacted with sufficient urgency to investor concerns about its board composition and corporate culture,” said Hermes director Jennifer Walmsley in a statement.
“The time is right for the company to appoint an independent chairman to rebuild trust, help correct the governance discount, and ensure that the interests of all investors are properly represented.”
The scale of influence held by members of the Murdoch family at News Corp has long been a source of concern among investors, with Rupert Murdoch established as both chairman and CEO and his son James widely regarded, at least until recently, as his heir apparent.
As well as the three Murdochs, Hermes said it will not support directors “affiliated” with the family and pointed to Arthur Siskind, listed as a senior advisor to the chairman and Andrew Knight, the non-executive chairman, in this context.
The pension investor’s statements came ahead of an AGM on 21 October and its governance requests included the appointment of “credible outside directors” as well as a “genuinely independent chair”.
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