By Kevin McCauley
A big British institutional investor today announced support for the shareholder resolution to strip the chairman title from News Corp. CEO Rupert Murdoch and give the position to an independent director. The measure faces a vote at News Corp.’s Oct. 16 annual meeting slated for Los Angeles.
Hermes Fund Managers Ltd. says it’s backing the proposal put forward by the Christian Brothers Investment Services and Local Authority Pension Fund Forum.
Hans Hirt, global head of corporate engagement at Hermes, said his organization believes “News Corp has still not sufficiently addressed the significant shareholder concerns about its board structure and corporate culture highlighted at last year’s annual meeting. The time is right for the company to appoint an independent chair in order to rebuild trust, and ensure that the interests of all investors are more properly represented.”
His statement does acknowledge recent changes by the company, which including the recruitment of outside board members, that were made following the phone hacking scandal.
News Corp. maintains that it can better “execute its strategy and business plans to maximize value” with Murdoch in both posts.
The company also believes there is “no established consensus that separating the roles of the CEO and Chairman is a corporate governance best practice or that such a separation enhances returns for stockholders.”
The Murdoch family controls about 40 percent of News Corp.’s voting shares.
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