The pressure on Rupert and James Murdoch to resign from the board of News Corporation intensified yesterday after a respected shareholder group, which oversees $140bn in assets, called on them to quit.
Hermes Equity Ownership Services, which is owned by and adviser to the BT pension scheme, yesterday demanded a "genuinely independent chair" at News Corp and called for family members to be replaced with "credible outside directors".
The group said it had been in contact with News Corp "for some time" but since the phone-hacking allegations this year "it has stepped up its engagement in relation to board composition".
Among its demands were the appointment of an independent group to conduct an investigation "and report findings publicly". It has also withdrawn support from board members Lachlan Murdoch, Arthur Siskind and Andrew Knight.
While Hermes clients together own slightly less than 0.5 per cent of News Corp stock, this adds more weight to the growing shareholder unrest. Last week, the Local Authority Pension Forum, which represents £100bn in assets under management, called for an overhaul of the board to "draw a line under the hacking".
This was followed only days later by a similar call by proxy advisers ISS, which advises 1,700 investors. Rival proxy advisory firm Glass Lewis also recommended investors to vote against six directors including James and Lachlan Murdoch.
Jennifer Walmsley, director of Hermes EOS, said yesterday that the group had "not reacted with sufficient urgency to investor concerns" adding: "The time is right for the company to appoint an independent chairman to rebuild trust."
But the Murdoch family owns 40 per cent of the voting stock of the company, which will make it tough for investors to oust board members at the AGM.Reuse content