Ethical Performance
inside intelligence for responsible business


Murdoch withdraws as hacking scandal continues

August 2012

News Corporation chairman Rupert Murdoch has fuelled speculation about an impending exit from the troubled media giant after resigning as a director of the three UK subsidiaries behind the Times, Sunday Times and the Sun.
The elderly media mogul has also resigned from a number of US director posts, yet to be confirmed by the Securities & Exchange Commission, and is facing pressure from a coalition of class A News Corp shareholders calling for his replacement at the helm by an independent chairman.
Rupert’s move follows the lead taken by his son James earlier this year, when he resigned his positions at News International and BSkyB. It is also thought likely to be connected with the decision to split News Corp into media and publishing arms. 
The resignations mean Murdoch Snr has severed involvement with the company’s UK newspaper stable, which is still mired in the phone-hacking scandal that broke last summer (EP, September 2011, p1) and which risks continuing reputational damage for the group. 
Eight former News of the World journalists, among them former editors Rebekah Brooks and Andy Coulson, along with private investigator Glenn Mulcaire, have been charged with a total of 19 counts of conspiracy in connection with the affair.
Brooks, also a former News International chief executive, distanced herself from the allegations, particularly those which provoked most public rage against the newspaper, that it hacked into mobile voicemails of murdered teenager Milly Dowler during the police hunt that followed her disappearance. 
In a statement issued through a solicitor, she said the charge concerning the schoolgirl “is particularly upsetting, not only as it is untrue but also because I have spent my journalistic career campaigning for victims of crime”.
The charges were announced by the Crown Prosecution Service on 24 July and coincided with the end of eight months of hearings at the Leveson Inquiry, set up in the wake of the News of the World scandal to investigate UK newspaper journalistic practices, as well as the wider relationship between the media, police and senior political figures. Lord Leveson is due to report by the end of the year.
Meanwhile, the investors’ coalition, including Calvert Investments and Connecticut State Pension Fund in the US, as well as Aviva and Co-operative Asset Management in the UK, have written an open letter of ‘explicit support’ for a shareholder proposal filed by Christian Brothers Investment Services (CBIS), and co-filed by members of the Local Authority Pension Fund Forum, asking for News Corp to elect an independent chairman.
The letter said: “We believe it is important for News Corp to uphold the highest standards of corporate governance in order to protect the value of our investment. Given the reputational, legal and regulatory risks brought about by allegations of phone hacking and payments to police officers by News Corp subsidiaries in the UK and subsequent investigations in the UK and the US, we believe the board is in need of independent leadership.”

UK & NI Ireland | People


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