Investors in News Corporation, the scandal-plagued parent company of Fox News owned by Rupert Murdoch, are calling for a shake-up ahead of the company’s annual meeting in Los Angeles later this week that includes removing Murdoch as CEO and voting him and his sons off of the company’s 15-member board of directors. Proxy advisory firms in Britain and the United States, as well as large pension funds in both countries, have advised shareholders to vote against the Murdochs and other sitting board members at a board meeting Friday, ABC News reports:
Proxy advisory firm Institutional Shareholder Services (ISS), whose clients are investors including pension and mutual funds, recommended that shareholders vote against the re-election of 13 News Corp. board members at the board meeting Friday in Los Angeles.
ISS said in its report: “The company’s phone hacking scandal, which began its public denouement in July 2011, has laid bare a striking lack of stewardship and failure of independence by a board whose inability to set a strong tone-at-the-top about unethical business practices has now resulted in enormous costs.”
The California State Teachers’ Retirement System and California Public Employees’ Retirement System (CalPERS), both invested in News Corp., have also called on Murdoch to step down, and Britain’s Local Authority Pension Fund Forum issued a similar call. CalPERS is the largest pension fund in the country with $225 billion in assets and about 1.45 million News Corp shares.
Last week, reports surfaced that scandal had spread to News Corps. flagship newspaper, The Wall Street Journal. The Journal’s European division reportedly pumped up circulation numbers artificially, leading to the resignation of Andrew Langhoff, the European director of Dow Jones and Co., a News Corp. subsidiary that owns the Journal. News Corp., meanwhile, continues to face investigations from both the British and American governments for phone-hacking scandals and potential violations of American law that ensued, as well as allegations that its reporters hacked into phones used by the families of 9/11 victims.
News Corp. responded to the ouster calls, saying ISS and other investors were putting a “disproportionate focus” on the scandals and that it is taking the investigations “very seriously.” “However,” the company said in a statement, “our broad, diverse group of businesses across the globe is extremely strong today.”