It may not be a lot of money when compared with News Corp’s $57.5bn market capitalisation, but the Church offloading shares in Rupert Murdoch’s empire sends out a powerful message about the firm’s credibility. Despite intense criticism from investors, 81-year-old Murdoch still holds the chairman and chief executive positions. And now the Church feels News Corp’s board has done too little to sharpen up its corporate governance since the phone-hacking scandal.
In a statement, the C of E’s Ethical Investment Advisory Board said that after a year of talks, it was ‘not satisfied’ that News Corp had shown a commitment to reform in the aftermath of scandal that engulfed the News of the World newspaper. As an investor, the Church is a serious player: along with its Church of England Pensions Board, it holds about £8bn worth of assets. This makes it one of the UK’s biggest investing institutions.
And Murdoch should not be too confident about his dual position: other investors are talking about clubbing together to oust Murdoch over it, and are angered that the dual class share system means he holds a disproportionate amount of voting power on the board. Irked investors include the Co-Operative Asset Management, Aviva, and Legal & General investment Management. They have gone as far as writing to Murdoch explaining that they are calling for a new chairman. It looks like the writing is on the wall for Murdoch – he has already resigned a slew of directorships in his UK publishing business to ‘concentrate’ on the more profitable media operations in the US.
But, whatever your views on bible-bashers, it doesn’t look good when the Church of England dumps your stock over ethical issues. It is literally holier than thou, Rupert…