THE Church of England has made a series of demands of Rupert Murdoch’s News Corporation, after a face-to-face meeting with directors in which it raised “serious ethical concerns” about the company, after the phone-hacking scandal.
The secretary to the Church’s Ethical Investment Advisory Group (EIAG), Edward Mason, flew to the United States to attend the News Corp shareholders’ meeting and vote against the re-election of Rupert Murdoch’s sons, James and Lachlan, to the board of directors.
The Church holds $6 million in shares in News Corp, and wants to use its influence to try to change the company’s corporate governance.
Mr Mason said that he was granted a face-to-face meeting with a senior director, the first time that the Church had been able to engage directly with News Corp.
The attempt to remove James and Lachlan Murdoch from the board failed, as the Murdochs themselves own 40 per cent of the shares. It was revealed days after the meeting, however, that 35 per cent of voters were against James’s return to the board, and 34 per cent voted against Lachlan.
James has been recalled by Parliament next month to answer questions for a second time about phone-hacking at the News of the World.
Mr Mason said: “They cannot easily be defeated, but this time nearly 70 per cent of minority investors voted against members of the board. This level of dissatisfaction is remarkable. . . The EIAG’s normal strategy is to engage with companies when we have ethical concerns, and News Corp is at the top of the list at the moment for us. This is as serious as Vedanta for us — the ethical concerns are so great.”
The Church pulled its shares out of Vedanta, the Indian mining company, over its human-rights record, last year (News, 12 February 2010).
In his intervention at the shareholders’ meeting, Mr Mason demanded that the company should hold all those aware of the phone-hacking at the News of the World to account. He said: “It is completely unacceptable to us that this has not yet happened.”
He also demanded that a code of ethics should be put in place, which all executives should be made to sign, and that there should be radical changes to corporate governance, including a restriction of the Murdoch family’s voting rights, and more independent voices on the board.
Mr Mason concluded: “There must be a fundamental transformation of ethics and corporate governance at News Corporation.” Rupert Murdoch told shareholders: “There are real issues that we must confront and are confronting.