GMI Ratings Governance Issue | News Corp. Region: North America Sector: Cyclical Consumer Goods / Services Industry: Media Diversified Market Cap: $32,656.3mm (Large Cap) ESG Rating: F AGR: Aggressive (18) News Corp. is in trouble again this week, with more arrests related to its bribery investigation and the disclosure that foreign investors were holding too much of its stock. Nonetheless, the media conglomerate’s chairman Rupert Murdoch remains supervised by a mostly friendly board. London police reportedly arrested three suspects and raided their homes early Thursday, including The Sun’s royal editor Duncan Larcombe, in the latest rash of headlines about an investigation into allegations of corruption involving journalists and British police. Meanwhile News Corp. said Wednesday that foreign investors held 36% of its voting stock, exceeding a 25% limit under a U.S. law, and suspended some of their voting rights as a result. Britain’s media ethics watchdog, the Leveson Inquiry, said it will question Murdoch and his son James next week into revelations that journalists at the now shuttered News of the World used hacking as a reporting strategy, news reports said Thursday. GMI Ratings has given News Corp. an F on its corporate governance. Although the scandal erupted in the summer of 2011, News Corp.’s board has failed to take action against senior executives. After James Murdoch stepped down from his role as executive chairman of News International, a company statement explained this February that he had moved to New York and will focus on expanding the international TV businesses. News Corp.’s board lacks the independence to criticize objectively. It includes eight long-tenured directors – five of whom have served at least 20 years – six insiders and three Murdoch family members. The company established a committee in July to undertake an internal investigation supervised by director Viet Dinh, who also happens to be the godfather of Lachlan Murdoch’s son. News Corp. did not respond to a request for comment within press time.
Governance Issue: News Corp.
April 19, 2012 in Flash Reports