Activist withdraws ‘misinformation’ proposal at Fox following governance review commitment

Arjuna Capital drops request at US news giant following commitment to hire a law firm to assess risk oversight in the wake of multi-million-dollar settlement.

US activist investor Arjuna Capital has withdrawn its shareholder proposal at Fox Corporation after the US media giant committed to hire a law firm to assess its oversight of risks.

The proposal, which was filed in May, called on Fox to report on the merits of establishing a board-level risk oversight committee.

It highlighted the “significant reputational and legal risks” posed by the coverage of debunked election-rigging claims in relation to the 2020 US presidential election by the company’s networks.

In April, Fox News reached a reported $787 million defamation settlement with electronic voting company Dominion Voting Systems.

Fox issued a statement at the time acknowledging the “court’s rulings finding certain claims about Dominion to be false”.

“This settlement reflects Fox’s continued commitment to the highest journalistic standards. We are hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues,” it added.

Fox is still facing a defamation lawsuit from another voting technology firm, Smartmatic, which is seeking $2.7 billion in damages.

“Given these financially material recent events,” Arjuna’s proposal stated, “Fox must address how it is assessing and mitigating risks such as misinformation and disinformation.”

Last month, Fox filed a “no action” request at the US Securities and Exchange Commission seeking the regulator’s blessing to be allowed to omit the proposal, arguing that the request was already being substantially implemented.

“After discussing the proposal, the board concluded that conducting an evaluation of the merits of establishing a risk oversight committee is an advisable exercise and is taking steps to implement the proposal,” it wrote.

The media firm revealed that it had hired law firm Cleary Gottlieb Steen & Hamilton to undertake the assessment in order to ensure it is “unbiased”.

“Following the law firm’s delivery of the findings of this assessment and board deliberations, the board commits to disclose the key conclusions and its response in the company’s proxy statement for the 2024 annual meeting of stockholders,” it said.

Last week, in another filing to the SEC, Fox revealed that Arjuna had now withdrawn its proposal.

Julia Cedarholm, Arjuna’s senior associate, ESG research and shareholder engagement, told Responsible Investor that it withdrew their proposal on 9 August after the company agreed to fulfil the requests.

She added that the fund is “encouraged” that Fox has committed to hiring a law firm to assess its risk oversight governance, including the potential merits of establishing a risk oversight committee.

“Fox has received a lot of pressure from investors in recent months due to the defamation lawsuits, and I think this is what led them to recognise that fulfilling the proposal’s request would help address some of these concerns,” Cedarholm said.