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LAPFF opposes James Murdoch’s re-election as BSkyB chairman

Voting alert follows engagement and evidence before Parliament

The Local Authority Pension Fund Forum (LAPFF) has advised its members to oppose James Murdoch’s re-election as chairman at UK satellite broadcaster BSkyB.

The forum pointed to concerns about Murdoch’s independence, and the “ongoing risk of reputational contagion” from his association with the phone-hacking scandal which has engulfed News Corp, the media firm where he is a director and which owns a controlling 39.14% stake in BSkyB. It follows Murdoch’s second appearance before the House of Commons’ media select committee yesterday.

The LAPFF has 54 members with combined assets of £100bn (€116.7bn) which own around 1% of the company. It issued the alert to its members ahead of the BSkyB annual general meeting on November 29.

“Having undertaken extensive research into the phone-hacking scandal, and having engaged with BSkyB directly, LAPFF believes the company would now benefit from the appointment of an independent chair,” it said.

Responsible Investor reported yesterday that major investors such as Aviva and Co-operative Asset Management were likely to withhold support from Murdoch at the meeting.One governance analyst told RI it was “pretty much a bang on oppose”.
The forum said its advice takes account of the evidence Murdoch provided to the committee.

The forum is, however, advising re-electing BSkyB Deputy Chairman and Senior Non-Executive Director Nicholas Ferguson, the chairman of private equity group SVG Capital – “in recognition of the company’s willingness to engage with the Forum”.

The LAPFF says Murdoch’s role as a director of Sky’s largest shareholder, News Corp, has raised questions over his ability to represent minority shareholders. With News Corp now dropping its bid to buy the rest of BSkyB, “the case for appointing a chair who is independent of the controlling shareholder is hard to ignore”.

“BSkyB shareholders need to see some distance put between the company and the scandal engulfing News Corp, but this is not possible without governance reform,” said LAPFF chair Ian Greenwood.
Last month, the Local Authority Pension Fund Forum advised its members to oppose the election of Rupert and James Murdoch as directors at News Corp.’s AGM.