One-third of independent investors vote against chair
James Murdoch survived an attempt to oust him as chairman of U.K. paybox BSkyB on Tuesday, but the phone-hacking scandal at a News Corp. tabloid continues to bite.
At a highly charged BSkyB annual meeting held in Central London, Murdoch was re-elected; one-fifth of investors called for him to stand down. Murdoch, who arrived at the meeting flanked by bodyguards, according to an eyewitness, was backed by 81.24% of stockholders, with 18.76% voting for him to quit.
Given that News Corp. owns a 39% controlling stake in BSkyB, the figure indicates that around one-third of independent investors want Murdoch to go. He received the support of 55.7% of independent shareholders; 31.4% voted against him.
The dissident voters fear the paybox’s reputation may be tainted by the phone-hacking and police bribery scandal at the now-defunct News of the World newspaper that occurred during Murdoch’s tenure atop News Corp.’s British publishing arm. The scandal skewered the conglom’s bid to buy the 61% of BSkyB stock that it does not own already.
At the meeting, BSkyB deputy chair Nicholas Ferguson said that another bid was “a very long way off.”
The most outspoken attack on the BSkyB topper, who is also News Corp.’s deputy chief operating officer, came from Guy Jubb, head of governance at Standard Life, which manages more than 6 million BSkyB shares. Calling for a “new and independent chairman” to be appointed, he said: “We explained to Ferguson that the unsuccessful bid approach from News Corp. had magnified the conflicts of interest which the independent non-executive directors have to deal with and, therefore, that it is inappropriate that the group’s board (or indeed the board of any company) is led by a representative of its largest shareholder and putative offeror.
“We pointed out that our misgivings had been heightened by the revelations of stewardship shortcomings at the News of the World, a title for which Mr. Murdoch bore a measure of responsibility.”
He said he was “deeply disappointed” that not a single board member was prepared to speak out against the chairman.
Ferguson told shareholders that Murdoch was doing a good job: “He runs an excellent board. Discussions are open and frank, his chairing is very good. He has put in place strong governance procedures. He has a strong strategic view.”