Every member of the News Corp. board of directors will return for another year, but several shareholders called for Rupert Murdoch to leave his role as chairman of the company at Tuesday’s annual shareholders’ meeting in Los Angeles.
The shareholders cited the phone hacking scandal in the UK and the company’s response to it as just one example of internal problems at the company.
Julie Tanner, a director at Christian Brothers Investments Services, argued that having Murdoch as both CEO and chairman created a conflict of interest. Having an independent board member would ensure that someone looks out for shareholders more than the company's existing leadership.
Despite the insistence of these shareholders, that motion did not pass a vote. They did prompt Murdoch and board member Viet Dinh to defend the current structure as the best option for the company.
Murdoch noted that while an independent chairman is common in Britain, 70 percent of major American companies have their CEO serve as chairman.
“We are an American company,” Murdoch asserted while Dinh added that Murdoch's combined role ensured “strong and consistent leadership.”
Several other shareholders argued that the company should do away with its dual-class share structure, which concentrates about 40 percent of voting shares in the hands of the Murdoch family. That helped the Murdochs shoot down calls for new board members at last year’s meeting, which occurred a couple months after the revelations of phone hacking at News Corp.’s now-defunct News of the World tabloid.
Laura Campos of the Nathan Cummings Foundation said the dual-class structure helped to "insulate management from shareholder concerns" and proffered that Murdoch should not hold so much voting power.
"That these revelations took years to uncover and address suggests the need to rebalance the power sharing structure among directors, investors and management to ensure long-term shareholder value," another shareholder added.
That motion also lost, as Murdoch stridently defended his company’s reaction to the scandal. He argued that top legal counsel Gerson Zweifach helped transform the company’s ethical standards.
“We have modernized our entire system of compliance from top to bottom,” Murdoch said, also noting that the company has found no evidence that the malfeasance of its journalists in the UK transpired at its other publications.