Hermes adds to calls for Murdoch to quit as News Corp chief

A FUND manager yesterday called for Rupert Murdoch to resign as chairman of News Corporation as a step toward restoring trust in the media company.

Hermes Equity Ownership Services, which manages more than $140 billion (£88bn) of assets, also called for Murdoch’s sons James and Lachlan and affiliated directors to be replaced by what it called “credible outside directors”.

“News Corp has not reacted with sufficient urgency to investor concerns about its board and corporate culture,” said Hermes’ director Jennifer Walmisley.

Earlier this week, another group, Institutional Shareholder Services, had urged shareholders to throw out the entire 15-member board at News Corp’s annual meeting in Los Angeles on 21 October.

Questions about News Corp governance flared after the News of the World was shut down amid the scandal over illegal phone hacking and alleged bribery of police officers. The scandal has claimed several top Murdoch executives, and several former employees have been arrested.

There was further embarrassment for New Corp this week by reports that the Wall Street Journal Europe had published two articles as part of a deal with a supporter to distribute cut-price copies to students.

Hermes, which represents about one-half of 1 per cent of News Corp shares, said it would not vote next week for the re-election of directors Arthur Siskind and Andrew Knight because of concerns about their independence. Both have been on the board since 1991.

The Murdochs control the company through a family trust that owns 38 per cent of voting shares worth $5.1 billion.

Institutional Shareholder Services said the hacking scandal “laid bare a striking lack of stewardship and failure of independence by a board whose inability to set a strong tone-at-the-top about unethical business practices has now resulted in enormous costs.”