“The independent directors should never have allowed executive chairman Rupert Murdoch to suppress the votes and this action once again demonstrates why News Corp needs a genuinely independent chairman to steer governance reforms,”. Contributing editor-at-large, Tess Lawrence, stands shoulder-to-shoulder with shareholder activist, Stephen Mayne.
In a blistering show of corporate contempt, the Australian Shareholders’ Association has called for immediate resignations from the News Corp Board.
But despite Mr Rupert Murdoch’s recent curious performance at Britain’s Parliamentary enquiry, that implied the leadership of News Corp may not be suitable country for old men, the ASA did not call for the Murdoch Patriarch to fall on his poisoned pen, but instead condemned the way he conducted the AGM.
Indeed,Mr Murdoch seemed somewhat perkier at the AGM before shareholders than he did before parliamentarians and the ASA must be giving him the benefit of the gout.
In a strongly worded Press Release issued late yesterday afternoon, the ASA called for board resignations to start from Tuesday, October 25,’ in light of the record protest votes recorded at the annual meeting ( last Friday in Los Angeles ) against a range of directors and the renumeration report.’
‘ASA recommended against five News Corp directors – James Murdoch, Lachlan Murdoch, Andrew Knight, Arthur Siskind and Viet Dinh – and they received 5 of the six largest protest votes.’
‘ASA CEO Vas Kolesnikoff said there is no reason why the long overdue governance reform at News Corp cannot start today with the immediate resignations of Andrew Knight and Arthur Siskind, two long serving directors and former executives of the company.
The ASA’s website lists Mr Kolesnikoff ( whose name, if pronounced a certain way resembles an uncanny resemblance to a certain machine gun ) as being appointed CEO and Company Secretary since January this year and cites him as being involved ’ in banking and finance for over 20 years in organisations including KPMG, Macquarie Bank.AMP, Merrill Lynch and Westpac.’
But the ASA had no hesitation in singling out two of Rupert’s younger mates.
“ASA calls on lead independent News Corp director Sir Rod Eddington to immediately facilitate the departures of Mr Knight and Mr Siskind, who are both in their 70s and have served on the board for a combined 40 years,” Mr Kolesnikoff said.
“Whilst the changes required are far more substantial, these two resignations are obvious initial moves that would signify the board respects the position of the overwhelming majority of independent voting shareholders who voted against their re-election.”
“Mr Knight is the long-standing chairman of the remuneration committee, so the 232 million votes against the remuneration report and the 214 million votes against his own re-election are two votes of no confidence from investors.”
‘ASA also raised concerns about the probity and processes surrounding the vote after News Corp monitor ( for ASA ) Stephen Mayne was repeatedly rebuffed at the annual meeting when requesting timely disclosure of the voting position.
“The independent directors should never have allowed executive chairman Rupert Murdoch to suppress the votes and this action once again demonstrates why News Corp needs a genuinely independent chairman to steer governance reforms,” Mr Mayne said.
“Shareholders should have been able to debate the fact that a record 232 million were voted against James Murdoch’s resignation, representing 35% of the total vote and clear majority of the independent vote once the Murdoch family’s 317 million voting shares are excluded.”
“Instead, James Murdoch didn’t say a word at the meeting when he should have been explaining the phone hacking scandal and allowing the independent directors to discuss what the size of the protest vote meant for his ongoing role at the company.”
‘ASA supports Rupert Murdoch remaining as a director of News Corp and notes that his protest vote of 91.8 million was the 9th highest.
ASA also respects the right of the Murdoch family to retain some board representation.
‘However, this needs to be balance(d) by a more democratic share structure and a clear majority of independent directors who can balance the recent excesses of management in areas such as corporate practices, executive pay and acquisitions.
‘For these reasons, ASA is seeking the immediate departure of Mr Knight and Mr Siskind. And if Mr Murdoch and the independent directors refuse to fire these directors, then they resign of their own volition in a mark of respect to good governance after a record protest vote.
The ASA Press Release goes a long way to explaining what actually took place at the AGM – and when you read the protest numbers – we get an idea of the sheer volume of disquiet and lack of confidence in the News Corp board.
News Corp would be foolish if it underestimates the tempered steel of longstanding activist Stephen Mayne, founder of the since sold Crikey website who has probably done more than any other journalist in this country to hold News Corp to account.
The press statement by the Australian Shareholders’ Association signals it is not going to allow News Corp to suppress its voice in the public space and will undoubtedly have an impact on any media enquiry in Australia or elsewhere just as it will undoubtedly have an impact on News Corp’s attempt to armwrestle the Australia Network from the ABC – the latter yet another process that needs to be independently investigated.
As ASA’s representative, and special rapporteur not only for the ASA – but for the Australian media it seems, Stephen Mayne has a legion of followers who not only admire him for his courage, but respect him for his persistence, as well as his journalism.
The rest of us so often rely on his forensic knowledge of the corporate labyrinths, and on his interpretation of what it all means.
Ironically, in terms of rehabilitating News Corp, Mayne would have made a fine CEO. He might yet. When it self implodes or is forcibly dismantled and pieces fall to earth.