Following the advice of several heavyweight investor organisations, Calpers – which manages California public employee pensions – has declared it will vote against maintaining Rupert Murdoch on the board of News Corp at this week’s AGM.
Calpers is concerned about the power held by Murdoch and other members of his family.
The widespread scandal closed the company’s best-selling UK newspaper, the News of the World.
In a BBC interview, Anne Simpson, Calpers senior portfolio manager, said that ethics was at the heart of any successful business: “Leadership on that issue is critical, so we look to the board in its next phase to work out how to establish a reputation on leadership for ethics.”
Calpers is also concerned about standards of corporate governance at News Corporation, with Rupert Murdoch occupying both chairman and chief executive positions.
“It’s extremely important an independent executive be appointed at News Corp and that would require Rupert Murdoch to step down from both those jobs,” she said.
The chances of Calpers succeeding in making Murdoch exit at the AGM on Friday are slim, because the Murdoch family control about 40 per cent of the votes, despite only owning about 12 per cent of News Corp’s stock.
“We’re voting against Rupert Murdoch, his two sons who sit on the board and two of the directors who are non executive, but have been on the board for a very long time,” said Simpson, who represents seven million shares.