Prominent Shareholder Advisor Backs News Corp. Board Slate
News Corp.'s board and the Murdoch family, which controls the entertainment conglomerate, received a key endorsement late this week, ahead of the company's annual shareholder meeting in LA mid-month.
Shareholder advisory firm Institutional Shareholder Services (ISS) recommends that investors vote in favor of the re-election the company's board at the Oct. 16 meeting.
Last year, amid the phone hacking scandal and concerns about corporate governance issues, ISS had told investors to vote against its slate of board members.
Meanwhile, another closely followed shareholder advisory group, Glass Lewis, has recommended that investors vote against six directors, including Rupert Murdoch's sons James and Lachlan Murdoch. It reiterated that having too many Murdochs on the board could hurt the company's governance set-up and would weaken the board's independence.
Glass Lewis in that context is also backing a proposal to name an independent chairman as some have pushed for Rupert Murdoch to give up that role.
ISS also signaled sympathy for the idea of more board independence, but didn't go as far as backing the proposal outright. Citing the phone hacking scandal and the board’s response to it, among others, it said "it appears that shareholders would benefit from increased independent leadership of the board."
Others have said News Corp. should be free to pick any chairman it wants.
The board currently includes Rupert, James and Lachlan Murdoch and president and COO Chase Carey. Shareholders at the meeting will also get to vote on proposed new additions Elaine Chao, the former U.S. labor secretary, and Alvaro Uribe, the former prime minister of Colombia.
The Murdoch family controls about 40 percent of News Corp.'s voting stock. Ally and Saudi Prince Alwaleed bin Talal owns about another 7 percent. Observers therefore once again expect any opposition to board members to be mostly symbolic.
James and Lachlan Murdoch were opposed by about 35 percent of shareholders when excluding the family vote last year.