Things could be interesting in Los Angeles on Oct. 21 when News Corp holds its annual shareholders meeting. Advisory firm Institutional Shareholder Services recommended today that stock owners reject 13 of News Corp’s 15 board members, including the three Murdochs: Rupert and his sons James and Lachlan. Joel Klein, who runs News Corp’s Education Division, and Accel Partners’ James Breyer were the only nominees deemed acceptable by ISS. The firm says that while the News Of The World phone-hacking scandal “is perhaps the most visible and severe example of the failure of board stewardship, it is part of a mosaic of failures of board independence, oversight, and responsiveness to shareholder concerns stretching back at least to 2004, when the company reincorporated from Australia to Delaware.” The report probably won’t affect the outcome of the shareholder vote: Due to News Corp’s dual stock arrangement, the Murdoch family controls about 40% of the voting shares even though it owns just 12% of the equity. Rupert’s ally, Prince Alwaleed bin Talal, controls an additional 7% of the votes.
News Corporation says that it “strongly disagrees” with ISS’ recommendations because the “disproportionate focus” on the scandal is “a disservice to our stockholders.” The company adds that ISS “failed to consider that the Company’s compensation practices reflect its robust performance in FY 2011 driven by its broad, diverse group of businesses across the globe.” (more…)