The nation's largest public pension fund said it would vote against the reelection of media mogul Rupert Murdoch and his sons, James and Lachlan, to News Corp.'s board of directors.
The California Public Employees Retirement System, or CalPERS, said in a statement Friday that the media giant's shareholders would benefit from greater board independence because of the dual class voting structure of the company. Murdoch controls about 40% of News Corp.’s voting shares.
The CalPERS announcement comes as an influential advisory firm, Institutional Shareholder Services, this week advised voting against the reelection of 13 of the company's 15 directors, saying the British phone hacking scandal, and subsequent closing of the News of the World tabloid, reflects a failure of board “stewardship.”
Hermes Equity Ownership Services, another advisory service affiliated with Britain's largest pension fund, joined in calling on investors Friday to vote against the reelection of any Murdoch family member to the board at next week's annual shareholders' meeting.
CalPERS said it would withhold voting its nearly 1.5 million shares for the reelection of James and Lachlan Murdoch, Arthur Siskind, News Corp.’s former general counsel, and Andrew Knight, the former executive chairman of News International, the company's British publishing arm. It also declined to support Rupert Murdoch, who serves the dual roles of chairman and chief executive, calling instead for an independent chairman to oversee the company.
“Calpers expects the Board to continue its efforts to rejuvenate the News Corporation Board with new independent directors,” the pension fund said in a statement.
News Corp. earlier this week issued a statement saying the board has taken “decisive action” to hold people accountable and take measures to “prevent something like this from ever occurring again.”