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Rupert Murdoch
A resolution has been filed by News Corp shareholders in the US, UK and Canada calling for Rupert Murdoch to step down. Photograph: ZUMA/Rex Features
A resolution has been filed by News Corp shareholders in the US, UK and Canada calling for Rupert Murdoch to step down. Photograph: ZUMA/Rex Features

Rupert Murdoch must step down as News Corporation chair – shareholders

This article is more than 10 years old
Christian Brothers Investment Services demands action to 'dramatically revise corporate governance practices'

Dissident shareholders are pressing once more for the media mogul Rupert Murdoch to step down as chairman of News Corporation.

Shareholders from the US, UK and Canada filed a resolution on Tuesday, calling for News Corp to appoint an independent chairman. A similar resolution attracted strong support at the media company's annual shareholder meeting last year.

The proposal was introduced by Christian Brothers Investment Services (CBIS), which manages $4.6bn for Catholic institutions worldwide. It is backed by the UK's Local Authority Pension Fund Forum, with assets of £115bn ($178.9bn), and British Columbia Investment Management Corporation, one of Canada's largest institutional investors.

In a separate resolution, Nathan Cummings Foundation, an ethical investment group, has called on News Corp to end the dual-class share structure that allows the Murdoch family to control its media empire despite owning a minority of shares.

A CBIS statement said: "A resolution introduced at last year's meeting which called for an independent chairman was approved by two-thirds of the independent shareholders, while another calling for the elimination of the company's dual-class share structure was approved by 62% of the public shareholders.

"The shareholders believe that by responding positively to these corporate governance issues, News Corporation can improve oversight of management, reduce business risk and better represent the interests of all shareholders. These two resolutions are the latest salvos in an ongoing campaign by concerned institutional investors to dramatically revise the corporate governance practices at News Corporation."

Pressure for change from shareholders has been mounting since the phone-hacking scandal at News Corp's UK newspapers triggered investigations on both sides of the Atlantic. Given the Murdoch family's control of News Corp's shares, the measures are unlikely to succeed.

The company announced last year that it is intending to split its publishing assets, including the Wall Street Journal, Dow Jones and Times newspapers, from its faster-growing TV and film assets. Murdoch plans to be chairman of both companies.

News Corp released its latest quarterly results in New York later on Wednesday. The company's revenues rose 14% from a year earlier to $9.5bn in the quarter ended 31 March, ahead of analysts' expectations. Net income increased to $2.85bn as a 17% rise in its cable business offset a dip in its publishing earnings.

The company announced that the hacking scandal had cost it $42m over the quarter – the company has now incurred more than $380m in costs related to the scandal.

Chase Carey, News Corp's chief operating officer, said the new publishing company, News Corp, would update investors about future plans at the end of May. The TV and film business, to be called 21st Century Fox, will hold an investor conference in August.

Carey said he was "disappointed" with ratings at Fox, where viewership of the declining hit American Idol has slipped dramatically in the show's 12th season. The decline of Idol has helped CBS take the top slot among key advertising demographics, ending an eight-year run at the top for Fox. Fox will be unveiling new shows to advertisers and the press at the "upfronts" – the major media firms' seasonal showcases – next week.

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