Pressure mounts on News Corp board as US proxy firms weigh in

ISS and Glass Lewis recommend director no votes.

Pressure is mounting on embattled media group, News Corp. to overhaul its family-heavy board following the UK phone hacking scandal after shareholder voting advisory giants ISS and Glass Lewis came out with recommendations against several of the company’s directors ahead of next week’s October 21 annual general meeting (AGM).
The US proxy giants join opposition from an array of investor groups, including the Australian Council of Super Investors, PIRC, the UK proxy advisory firm, and the £100bn (€115.6bn) UK Local Authority Pension Fund Forum, which has advised its 54 members to oppose the election of Rupert and James Murdoch as directors.
ISS, which is the world’s biggest proxy advisor, said investors should vote against the re-election of 13 out of 15 board members – including Rupert Murdoch and his
sons, James and Lachlan – because of a need to establish more independent oversight of management. Glass Lewis, the second biggest proxy voting firm, also said News Corp. needed a more independent board and is advising institutional investors to vote against James and Lachlan Murdoch and four other directors.In its report to investors , ISS wrote: “The company’s phone hacking scandal, which began its public denouement in July 2011, has laid bare a striking lack of stewardship and failure of independence by a board whose inability to set a strong tone-at-the-top about unethical business practices has now resulted in enormous costs—financial, legal, regulatory, reputational, and opportunity—for the shareholders the board ostensibly serves. While this scandal is perhaps the most visible and severe example of the failure of board stewardship, it is part of a mosaic of failures of board independence, oversight, and responsiveness to shareholder concerns stretching back at least to 2004, when the company reincorporated from Australia to Delaware.” In an unusual move, Christian Brothers Investment Services, the New York-based fund manager, aims to present a motion from the floor at the meeting calling for a separate chairman and CEO.