News Corporation shareholders announced on Wednesday the filing of a joint proposal for the appointment of an independent chairman of the company.
The group will heap pressure on media mogul Rupert Murdoch to step down from his role in News Corp, which owns newspapers The Times, The Sun and formerly News of the World. Last year, a similar motion to remove Murdoch attracted strong support (two-thirds’ share of the vote) at the company’s annual shareholder meeting.
The proposal was introduced this week by Christian Brothers Investment Services (CBIS),which manages investments worth $4.6b for Catholic institutions worldwide. It is backed by the Local Authority Pension Fund, an association of 55 public sector pension funds based in the UK, with combined assets worth over £155b.
Pressure from shareholders has been mounting since the phone-hacking scandal at News Corp’s UK newspapers triggered investigations on News Corp divisions in both the UK and US. The scandal led to the resignation and criminal trial of News International chief executive Rebekah Brooks and the Leveson inquiry into press standards. Murdoch’s paper at the center of the scandal, The News of the World, was subsequently closed. Given the Murdoch family’s control of News Corp’s shares, the proposals are thought unlikely to succeed.
The company plans to split its publishing titles, including the Wall Street Journal and Sunday Times, from its considerably more profitable pay-TV and film assets. On Wednesday, the company announced its latest quarterly revenues rose 14 per cent from a year earlier to $9.5bn in the quarter ending 31 March. Net income increased to $2.85bn, and its cable business assets rose 17 per cent. The figures were ahead of analysts’ expectations.
A CBIS statement said: “A resolution introduced at last year’s meeting which called for an independent chairman was approved by two-thirds of the independent shareholders, while another calling for the elimination of the company’s dual-class share structure was approved by 62 percent of the public shareholders.
“The shareholders believe that by responding positively to these corporate governance issues, News Corporation can improve oversight of management, reduce business risk and better represent the interests of all shareholders. These two resolutions are the latest salvos in an ongoing campaign by concerned institutional investors to dramatically revise the corporate governance practices at News Corporation.”