News Corp. Shareholder Group Calls for Change in Rupert Murdoch’s Role
News Corp. should split the roles of chairman and chief executive officer now held by Rupert Murdoch and make other changes, according to the Interfaith Center on Corporate Responsibility, which represents about 300 organizations with assets of more than $100 billion.
The ICCR is crafting a statement pushing for change at News Corp., facing fallout from alleged phone hacking at one of its London newspapers, and plans to release it this week, according to spokeswoman Susana McDermott.
The statement will call for the chairman and CEO positions to be held by two different people, and it will also include suggestions for other changes, McDermott said, without identifying them. The ICCR includes religious organizations and funds whose goal is to integrate “social values into investor actions,” according to its website. A “significant number” of the investors who are calling for the changes are shareholders in News Corp. (NWSA), McDermott said.
News Corp.’s now-defunct News of the World tabloid is accused of hacking hundreds of voice mails, including those of murder and terrorism victims, and bribing police for confidential information. Murdoch and his son James testified before a U.K. parliament committee last week over the allegations.
The scandal has led to the resignation and subsequent arrest of Rebekah Brooks, former Chief Executive Officer of News Corp.’s U.K. publishing unit. At least ten people have been arrested in total, including ex-News of the World editor Andy Coulson, who was U.K. Prime Minister David Cameron’s press chief until January.
The New York-based Christian Brothers Investment Services, a member of ICCR which holds 30,755 Class B voting shares of News Corp., has already filed a petition with News Corp. seeking the CEO and chairman split. News Corp. has considered elevating Chief Operating Officer Chase Carey to CEO, people with knowledge of the situation said last week.
Analysts and investors, including Don Yacktman, whose investment company was the eighth biggest holder of News Corp. Class A shares as of March 31, have acknowledged a “Murdoch discount,” which keeps the share price of News Corp. lower than the sum of its parts.
Saudi Prince Alwaleed bin Talal Al Saud, whose Kingdom Holding Co. holds 7 percent of the voting stock, said he was “supportive and confident in the leadership of Rupert and James Murdoch” in an e-mail July 20.
News Corp. fell 20 cents, or 1.2 percent, to $16.22 at 4 p.m. New York time on the Nasdaq Stock Market. The Class A shares have declined 10 percent since the Guardian newspaper reported on July 4 that News of the World accessed the voice mail of murdered teenager Milly Dowler.
To contact the reporter on this story: Alex Sherman in New York at email@example.com
To contact the editor responsible for this story: Peter Elstrom at firstname.lastname@example.org