US shareholders in Rupert Murdoch’s News Corporation are trying to gang up on Rupert Murdoch, his family and assorted cronies in an assault that, if even partly successful, will surely bring forward the day when the company’s newspapers, source of its current grief, are sold.
The ISS investor advisory group has joined the clamour against the Murdochs by recommending that shareholders vote against the re-election of 13 of the company’s 15 directors, excepting only recently appointed Joel Klein and James Breyer. The 13 include Rupert Murdoch, sons James and Lachlan, COO Chase Carey and long-serving non execs including former British Airways boss Sir Rod Eddington.
While not a shareholder itself, ISS, the biggest such body in the US, is highly influential and will embolden the pension funds and others who have already called for dramatic change at the company following the News of the World phone hacking scandal.
The ISS says the phone hacking scandal has “laid bare a striking lack of stewardship and failure of independence” by the board leading to enormous financial and reputational costs to shareholders.
The Murdochs have already closed down the News of the World, formerly the UK’s biggest circulation paper in the wake of the phone hacking scandal, leaving it with the still-profitable Sun and heavily loss-making Times and Sunday Times in the UK. The two UK tabloids were the most profitable part of News Corp’s global newspaper empire.
One obvious way for the Murdochs to appease critics would be to abandon newspapers altogether, which these days only account for a small portion of global revenues in comparision to its film and broadcast interests.