Workers’ Capital News - Nov. 14

In this issue:

Shareholder Activism

Shareholder Dissent Against News Corp Board Members

As reported by the New York Times, Responsible Investor, The Guardian & the Financial Standard, News Corp shareholders made their voices heard at the Annual Shareholder Meeting on Oct. 21st, casting votes on whether CEO Rupert Murdoch and the rest of the 15 member company board, should be allowed to retain their positions.

Over a hundred demonstrators, many carrying anti-Murdoch signs, were gathered outside the Fox Studios lot in Los Angeles, where the meeting was convened. New accusations of computer hacking by News Corps were also made at the meeting by Tom Watson, representative of shares owned by AFL-CIO and member of the British labor party. In the wake of the telephone-hacking allegations leveled against News of the World tabloid (owned by News Corp and now non-operational), the leadership of Murdoch and other board members, including his sons James and Lachlan, has been called into serious question.

Strong dissent by independent shareholders, including pensions giants such as Dutch fund APG and Australia’s ACSI, was reflected in the votes announced after the meeting. 69% of independent shareholders voted in opposition to the re-election of five board directors. Shareholder disapproval was directed mainly against James Murdoch, News Corp’s deputy COO, with 35% of votes against his reelection, and Lachlan Murdoch, with 34% cast against him. Investors’ discontent was also felt by board members Natalie Bancroft (33% voted against), Andrew Knight (32% voted against) and Arthur Siskind (30% voted against). Rupert Murdoch received a negative vote of 14%. It is important to note that because the Murdoch family owns a controlling share of voting rights, the re-election of the board was expected.  However, the level of independent shareholder opposition to the board has been described as ‘unprecedented.’ CalPERS’ Senior Portfolio Manager, Anne Simpson, commented that the vote sends a clear message to News Corps Directors about the need for responsible corporate governance and independent oversight.

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