Investor Consultants Urge Vote Against Murdochs
In the wake of the News of the World telephone hacking scandal, San Francisco-based Glass Lewis, which advises institutional investors that together manage more than $17 trillion in assets, has recommended that News Corp investors vote against the reelection of Rupert Murdoch's two sons, James and Lachlan, and other Murdoch family members and friends seated on the News Corp board. In a note to its clients reprinted in part by today's (Monday) Guardian newspaper, Glass Lewis advises them to "carefully consider the nature of the relationship each director has with the company and with its controlling shareholder, the Murdoch family, in order to establish a board with proper independence levels and strong oversight." The board election is scheduled for October 12. Several investor groups, including those based in the U.K. and Australia, have already indicated that they will vote against the Murdochs and other board members tied to them. But little hope is held for their success inasmuch as under the A- and B-class structures of the company's stock, the Murdoch family holds about 40 percent of voting rights while owning only 12 percent of the equity. UPDATE Another investor adviser, Institutional Shareholder Services, recommended today that News Corp shareholders vote against Rupert Murdoch, his two sons and 11 other board members, saying that the scandal "laid bare a striking lack of stewardship and failure of independence" of News Corp.'s board.