What's on the Agenda of News Corp.'s Board Meeting
A continuing scandal and a growing pile of cash give directors plenty to talk about
The full board of News Corp. will meet in Los Angeles on Tuesday for the first time since the phone hacking scandal catapulted the company into crisis. It's sounds like it'll be a nail-biter. The rumor mill seems like it's churning out a fresh menu of condemnations daily. Monday morning, Roy Greenslade at The Guardian reported that Rebekah Brooks, the former chief executive of News Corp.'s newspaper division, is still on the company's payroll as a director. Rupert Murdoch is jousting with fellow media mogul Silvio Berlusconi over the television market in Italy, where Berlusconi also happens to be prime minister and hopes to gain from News Corp.'s recent scrutiny. Meanwhile, Nick Davies, the Guardian reporter who broke the most sensational phone hacking stories, is telling all in interviews.
But the items on News Corp.'s agenda are more pressing than gossip. The company's stock is down 19 percent since the Milly Dowler revelation that News of the World hacked a murdered girl's phone on July 4, and stockholders are pressuring the 16-person board to address on the domination of the Murdoch family, who hold three seats. There is at least one bit of good news, however.
The company's "bulging pile of cash." Since public criticism forced them to abandon the deal to takeover the satellite television business BSkyB, News Corp. is stuck with $12 billion that they're not sure how to spend. According to The Wall Street Journal, they're considering taking advantage of BSkyB's low stock price and buying back more shares than the $5 billion worth they've already committed to. They might also raise the company's dividend in an attempt to placate investors.
Joel Klein's role doing damage control. David Carr at The New York Times devotes his column to detailing former New York City schools chancellor and the current head of Joel Klein's relationship with Rupert Murdoch. The two men have been friends for nearly 15 years and their closeness has raised some concerns over whether Klein might be biased in his role as head of News Corp.'s internal investigation committee into phone hacking. Klein reports to board member Viet Dinh, another long-time Murdoch family friend, who will discuss the committee's progress at the meeting tomorrow.
A resolution to strip Murdoch of his chairmanship. Christian Brothers Investment Services, an institutional investor with over 30,000 Class B shares in News Corp., submitted a resolution in July "to strip Mr. Murdoch of his chairmanship and appoint an independent board chairman at the company's annual meeting in October." Shareholders who are members of the Interfaith Center on Corporate Responsibility and control over a million Class A shares have also voiced concerns over Murdoch's ability to remain chairman and CEO of the company. The board will undoubtedly discuss how to deal with the mutiny.
Elisabeth Murdoch's conspicuous absence. News emerged Friday that Rupert Murdoch's daughter Elisabeth would not attend Tuesday's meeting as had been previously planned. The Wall Street Journal says the decision was made because "the company aspires to the highest standards of corporate governance and will continue to act in the interests of all stakeholders." This, in other words, is an acknowlegdment by the board of criticism that the Murdoch family too fully dominates the media conglomerate (see: Adweek editor Michael Wolff's case for why the clique of insiders deserve the "mafia" label). Regardless of whether or not they decide to discuss that bombshell of a topic, they'll probably talk about filling that empty seat.