News Corp asked to reform board by investors
- 18 July 2012
- From the section Business
A new group of investors in News Corp are lining up behind a motion asking the company to replace Rupert Murdoch with an independent chairman.
Eighteen investors have sent a letter to the News Corp board expressing their support for a shareholder resolution on the matter.
They hold less than 1% of the company.
News Corp has been under pressure in recent years from some shareholders unhappy about the Murdoch family's dominance.
The letter, signed by high-profile investors including the Aviva insurance giant, says: "We believe it is important for News Corporation to uphold the highest standards of corporate governance in order to protect the value of our investment."
It points to the recent list of allegations of wrongdoing at the News Corp's UK subsidiary the News of the World, which the company closed as a result.
"Given the recent reputational, legal and regulatory risks brought about by allegations of phone hacking and payments to police officers by News Corporation subsidiaries in the UK and subsequent investigations in the UK and the US, we believe the board is in need of independent leadership."
The resolution for change was filed by Christian Brothers Investment Services (CBIS) and members of the Local Authority Pension Fund Forum (LAPFF), organisations that own B shares.
Their new backers collectively own 13.4m News Corp Class A shares, which have fewer rights than Class B shares and do not allow them to file motions themselves.
The dual-class share structure at News Corp gives a strong power base to Rupert Murdoch and his close allies.
The next shareholder meeting is expected to be held in October later this year.
The Forum said the change, which it also proposed last year, was even more urgently needed because of the plan to restructure News Corp.
Rupert Murdoch last month announced plans to split the $60bn media giant into two companies.
The move should ringfence News Corp's profitable film and media business from its UK newspaper business, which is embroiled in the phone-hacking scandal.
News Corp's Fox networks in the US and its stake in UK satellite broadcaster BSkyB would form a film and media unit.
Book publisher HarperCollins would join newspaper titles such as the Sun.
Rupert Murdoch has said he would serve as chairman of both companies.