There is a shareholder advisory campaign calling for the removal of Rupert Murdoch, his two sons, James and Lachlan, and 10 other directors from the board of directors at the next NewsCorp shareholder meeting on 21 October. The radical shakeup would see 13 of the company’s 15 directors removed after the shocking events that took place at NewsCorp.

The investor advisory firm, Institutional Shareholder Services, has advised a complete refurbishment of the News Corporation board of directors in light of the shocking revelations that have emerged post the News of the World saga earlier this year.

The advisors wrote in a report that the News Corporation’s present directors, 13 out of 15 board members, failed to prevent the company from falling into utter disrepute.

The phone-hacking scandal led to the arrests of several News Corporation executives, parliamentary hearings and a public apology by Rupert Murdoch.

Chief amongst this was the unsolicited and widespread hacking, as well as illicit bribes paid to British police officers.

The scandal has cost News Corporation financially and its reputation has been severely damaged.

In light of this, ISS finds it somewhat of a joke that there may be a virtual tripling of Mr Murdoch’s cash bonus for the 2011 fiscal year from $4,4 million to $12,5 million.

It wrote that revelations had exposed:

A striking lack of stewardship and failure of independence by a board whose inability to set a strong tone-at-the-top about unethical business practices has now resulted in enormous costs — financial, legal, regulatory, reputational and opportunity — for the shareholders the board ostensibly serves.

The only two directors to receive approval from the advisory firm were Joel Klein and the venture capitalist James Breyer, because they have only served on the board for a few months.

NewsCorp “strongly disagrees” with them obviously, and company spokeswoman, Teri Everett, said in a statement:

The company takes the issues surrounding News of the World seriously and is working hard to resolve them. However, ISS’s disproportionate focus on these issues is misguided and a disservice to our stockholders.

Moreover, ISS failed to consider that the company’s compensation practices reflect its robust performance in FY 2011 driven by its broad, diverse group of businesses across the globe.

One thing is for sure, and that is that it’s going to be an interesting board meeting.

[Source: Guardian]