News Corp criticised over board nominees
News Corp’s nomination of two new outsiders – the former president of Colombia and George W. Bush’s former labour secretary – to its board is unlikely to avert another protest during the annual meeting for Rupert Murdoch’s media empire in October.
Activist shareholders and corporate governance experts are criticising the company’s director picks. They pointed to a wiretapping scandal in Colombia linked to the former presidential administration of nominee Alvaro Uribe. Although Mr Uribe was not charged in the scandal, the choice is seen as problematic given News Corp’s UK phone hacking scandals.
Outsiders also are criticising the independence of nominee Elaine Chao, a member of former US president George W. Bush’s cabinet who has previously worked as a paid contributor on Fox News.
“There are thousands of people in the world you could choose who might be less controversial choices, so judgment-wise, it is a little bit questionable,” said Lucy Marcus, a corporate governance expert. “It is almost like a dare. One step forward, two steps back.”
Mr Murdoch in a statement earlier this week described Mr Uribe as “a transformative figure who saved his country’s democratic institutions, revitalised its economy and restored the security of its people”. The company said in its proxy filing that Ms Chao’s work for Fox News and past contributions by the company’s political action committee to the campaign of her husband, Mitch McConnell, the Republican leader in the Senate, would not affect her independent judgment.
The brewing controversy comes almost a year after a contentious annual meeting where an unprecedented majority of News Corp’s independent shareholders voted to sweep Mr Murdoch, his sons and other directors off the board.
“The business is still making money,” Ms Marcus said. “Even though it has been fraught and there are real leadership and ethical concerns, you still have to look at the numbers. The numbers, they don’t look so bad, do they?”
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