Christian Brothers Investment Services (CBIS) is confident of the support of institutional investors and proxy voting agencies for its resolution calling for sweeping corporate governance reforms at scandal-torn media giant News Corp.
CBIS is calling for a separate chairman and CEO and an independent chairman at the company. “If it appears in the proxy it’ll get a good vote,” said Julie Tanner, Assistant Director of Socially Responsible Investing at CBIS. “I think this will be taken very seriously by other investors.”
In addition, she was confident that the influential proxy voting advisory firms would get behind the proposal. She told Responsible Investor: “Given everything that’s happened, I would expect the proxy voting agencies to support it.”
The latest moves come as the California Public Employees Retirement System, the largest US pension fund, said it was “considering our options” on News Corp. Anne Simpson, Senior Portfolio Manager for Corporate Governance at the (CalPERS) was quoted as saying by the BBC: “News Corp. does not have one share one vote. This is a corruption of the governance system.
“CalPERS sees the voting structure in a company as critical. The situation is very serious and we’re considering our options. We don’t intend to be spectators – we’re owners.”
CBIS has written to News Corp. requesting a so-called floor resolution, which allows a shareholder to speak on the floor the day of a company annual general meeting and have the proposal voted on by shareholders in attendance. The vote is non-binding.The procedure is outside of the normal SEC process and CBIS had to scramble to put together the resolution ahead of an official deadline.
A floor resolution is a tactic that has been employed recently by Tim Smith, Senior Vice President and the Director of ESG Shareowner Engagement at Walden Asset Management, at companies including J.P Morgan Chase, Pfizer and Kodak. The News Corp. AGM is likely to take place in October.
Tanner said she has not heard back yet from News Corp., which is not obligated to put include the proposal on the proxy. As far as is known, CBIS is the only shareholder that has filed any sort of AGM resolution relating to the hacking scandal.
CBIS has had the support of the 300-member $100bn Interfaith Center on Corporate Responsibility and the US SIF, the newly renamed Forum for Sustainable and Responsible Investment. “Shareholders require an independent voice and another layer of checks and balances,” Tanner said.
She said it was inappropriate for News Corp. Chairman Rupert Murdoch to abdicate responsibility for the scandal. “It comes from the top and for shareholders that starts with the Chair.”
Earlier, the UK’s Church investors’ Ethical Investment Advisory Group (EIAG) wrote to Rupert Murdoch calling for “all necessary measures to instil investor confidence”. The Massachusetts Laborers’ Pension & Annuity Funds is also sueing News Corp. saying it “systematically embarked on an escalating series of illegal misconduct under the direction and control of Rupert Murdoch”. The lawsuit has been amended to include some of the latest corporate governance issues at News Corp. throw up by the phone hacking scandal at News International, the UK arm of the group.