Pressure is growing on James Murdoch to step down as chairman of BSkyB as shareholders call for him to quit in the wake of the collapse of News Corporation's bid.
The Co-operative Asset Management, which holds shares in Sky and News Corp, followed Pirc, the corporate governance adviser, yesterday in calling for the appointment of a chairman with no ties to the failed bidder.
Niall O'Shea, the head of responsible investing at the Co-op's fund management arm, was forthright yesterday: "We believe radical reform is needed at both companies."
While none of Sky's 10 largest shareholders has yet to break rank, one warned yesterday that Mr Murdoch's role at the company was "a watching brief". The investor added: "We are not at the stage of raising our concerns with the independent directors, but this is a fast-moving situation."
Another institutional investor added: "There are clearly issues around the long-term governance of BSkyB," adding that many were waiting for developments before publicly opposing Mr Murdoch.
The Co-op has long been a vocal critic of the make-up of Sky's board "due to corporate governance concerns", Mr O'Shea said. As a result it has not supported management over issues involving the board at annual meetings since 1999. The Co-op has long also opposed Mr Murdoch's role as chairman of Sky "because of our concerns over an independent selection process, an opposition we maintain today".
His involvement in the recent scandals surrounding News Corp has only increased investor unease over his role at Sky. Yesterday, Pirc said the collapse of News Corp's offer was a chance to refresh the board. The body has expressed concerns over corporate governance since the company listed.
Alan MacDougall, at Pirc, said: "In light of current events it is time for the board to review whether BSkyB and its shareholders would benefit from a new, independent chair. And if shareholders agree it is time for reform, they should say so."Reuse content