Sky investors to vent their anger on Lord St John

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The Independent Online

Shareholders are preparing to register a protest vote against Lord St John of Fawsley at BSkyB's forthcoming annual meeting over his role as the company's senior non-executive director.

The Conservative peer will feel much of the anger that has arisen among shareholders over the appointment of a new chief executive for the company, a process he is overseeing. Lord St John is vying for re-election at the AGM, as is James Murdoch, son of chairman Rupert Murdoch and the man tipped for the job. James Murdoch is likely to attract a protest vote at the event, on 14 November.

Shareholders believe that Lord St John has not made himself available enough to discuss their concerns, following the cancellation of a recent scheduled meeting between him and the Association of British Insurers, a powerful shareholder group. Investors are not satisfied that the search for a new chief executive is a genuinely competitive process and they believe that the cancellation of the ABI meeting contravenes corporate governance codes - including the Higgs rules which stipulate that the senior non-executive director has a duty to hear the concerns of shareholders. A spokesperson for the ABI said: "Our meeting with Lord St John was cancelled and no alternative was offered."

In addition, the National Association of Pension Funds, the other leading shareholder organisation, is preparing a critical report on BSkyB, which will target Mr Murdoch Jnr and Lord St John. The report, which will be published on Friday, will make recommendations to members on the positions of Lord St John and Mr Murdoch Jnr on the BSkyB board.

Last year, the NAPF recommended a no vote on less than 1 per cent of resolutions and an abstention on just 7 per cent of shareholder votes before its members. However that included an abstention call on five BSkyB directors at the company's 2002 AGM. Analysts believe the NAPF will be even more critical this year.

Shareholders are concerned that Mr Murdoch Jnr is a "shoo-in" for the chief executive job at Sky - Mr Murdoch Snr has said that his son is the "best man" for the post, which will become vacant when Tony Ball departs in the next few weeks. Investors fear that with father and son in the two top jobs at BSkyB, there will be no effective separation between the chairman and chief executive.

Lord St John told The Independent that he had met the ABI over the issue. He insisted the appointment process was "fair, thorough and I have the greatest confidence in it". He added" "I spent over an hour with the ABI [in the first meeting]. I had nothing further I could tell them and also there were legal reasons [for not having the second meeting]."

If Mr Murdoch Snr is chosen to run BSkyB, shareholders will call for additional governance safeguards at the company, possibly including the appointment of an independent deputy chairman.