James Murdoch's King Canute act has finally come to an end. The word was yesterday being put out that the now former chairman of BSkyB was not pushed out. The decision to step down was his alone.
That, however, is just so much sophistry. He jumped out of the way before being hit by a really big wave. Whether that wave was generated by the Leveson Inquiry into press standards, or by his regulators at Ofcom or perhaps even by his own shareholders is immaterial. It was surely coming.
The wonder is that it took so long.
Mr Murdoch, of course, continues to deny all knowledge of the phone-hacking scandal that continues to cash a long shadow over his father's media empire. But in that case the fundamental question for BSkyB is still this: if Mr Murdoch was unable to see what was going on as an executive in command of the family newspaper business, then how can he be trusted to oversee the corporate governance of a FTSE 100 company? The fact that they are very different businesses is immaterial.
Perhaps the waters were muddied by the limp reaction to the scandal by some of those independent shareholders. One might wonder what it would take for the likes of Scottish Widows Investment Partnership and M&G, both of whom voted in Mr Murdoch's favour at the company's November AGM, to reject a chairman's reappointment. Similar problems will crop up again and again while fund managers like them continue to shirk their responsibilities to the people who put money in their charge – and who pay their fees.
In the meantime, BSkyB is still left facing some difficult questions.
Mr Murdoch will be succeeded by the company's senior independent director, Nicholas Ferguson, who will be the first non-Murdoch family member in the role. The company will be hoping that he will be sufficiently reassuring to get the more vocal critics among the group's independent shareholders to shut up for a while. He, as the senior independent director, is after all the person whose ears they have been bending.
However, the question mark hanging over him, and indeed the other independent directors, is why they didn't suggest, forcefully, that Mr Murdoch step aside much earlier in BSkyB's own interests. Given his connections to the business – and he once ran it rather successfully – it was always going to be difficult for Mr Murdoch to act on his own.
Another related problem that won't go away is that Mr Murdoch will remain a director of the company. The impression this gives is that he is being left in situ so that he can take his place at the head of the boardroom table when the fuss has all died down. For the company's own good, that's an impression which needs to be corrected.Reuse content