News Corporation's much trumpeted plans to improve its corporate governance procedures when it moves its listing from Australia to the United States do not go far enough, an influential shareholder advisory group said yesterday.
America's Institutional Shareholder Services is lobbying the media giant to "take more substantive steps to formalise and fully incorporate best practices" which would go beyond the concessions it unveiled last week.
ISS, which is affiliated to the National Association of Pension Funds in the UK, wants News Corp to create committees which are made up of independent non-executive directors.
It is also pushing for the company, which is headed by Rupert Murdoch, to appoint a lead director. Another request is for investors speaking for 10 per cent of its shares to be able call a special meeting, which would be a reduction from the 20 per cent level offered by the company last week.
News Corp, which owns The Sun and The Times, and the Twentieth Century Fox film studio, alarmed shareholders when it announced plans to move its share listing to the US because of the diminished rights given to investors there compared with its native Australia.
However, a set of concessions News Corp outlined last week, and repeated yesterday in an advert in The Times, have given shareholders some reassurance that the company would maintain their sway at a similar level to Australian standards.
While ISS is still urging News Corp to take "concrete steps" to further improve corporate governance, such as by disclosing the succession planning which will take place when Mr Murdoch steps down, the body said it was advising shareholders to back the company's plan at its meeting on 26 October.
In the UK, Colin Melvin, the head of corporate governance at Hermes, said he was still planning to speak to News Corp directly. But he added that the concessions the media group has said it would make, including maintaining a listing on the Australian stock exchange, had "encouraged" Hermes, creating a "much bigger chance" that it will support the plan to move the listing.
Separately, DirecTV, the satellite operator controlled by News Corp, said it was paying $579m (£322m) for stakes in Sky Brazil and Sky Mexico which are owned by News Corp and Liberty Media. While the deal consolidates DirecTV's operations in South America, the move highlights the complex corporate governance issues surrounding News Corp, which was in this case selling part of its business to another company which it also controls.
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