With 38.4% of the voting shares, there is no doubt Rupert Murdoch still controls News Corporation after 57 years as chief executive.
However, for the first time I can recall, Friday’s AGM in New York saw the independent directors placed under significant pressure over typically dubious practices pursued by the Sun King.
As the lead independent director, Melbourne-based Sir Rod Eddington’s oversight fell well short of the mark. After all, with less than 15% of the total shares on issue, what on earth was Rupert doing giving an unprecedented $US2 million of shareholders’ money to Republican causes?
When challenged by Democrat-friendly shareholders, Sir Rod could only say the two $US1 million donations to the US Chamber of Commerce and the Republican Governors Association were recommended by management and reviewed by the general counsel Lon Jacobs, who is just another executive.
Every Australian company that makes political donations has a specific board policy that tolerates it. For some reason, News Corp is different.
What is the point of having independent directors if management can just spray millions around to their pet political causes? When you look at the News Corp board it is hard to imagine which of them genuinely believe their job is to represent the non-Murdoch majority of shareholders. After all, Sir Rod leads a board classification process that somehow declares 75-year-old Ken Cowley, who has been with Rupert since 1964, is an “independent director”.
So if Sir Rod wanted to call a meeting of the independents to discuss concerns about Rupert, he’d have the forever loyal lieutenant Ken Cowley in the room.
But the News Corp board doesn’t even have a process of the independents meeting. Instead, last year they had six gatherings of the non-executive directors to talk about management. Lachlan Murdoch turned up to those meetings to critique the performance of his dad and brother James, who were together paid $33 million in 2009-10.
The Republican donations was the biggest story to come out of the AGM because Rupert stumbled in his answers, admitted earlier comments had been “foolish” and then declared it was “in the best interest of the country” that there was “a fair amount of change in Washington”.
It’s hard to think of a more partisan intervention by a media company two weeks before the crucial mid-term elections as Steve Olbermann pointed out in this video package broadcast on Friday night.
The AGM itself was an interesting affair but it remains a mystery why so few shareholders, ginger groups or critics turn up.
Having ditched the traditional post-AGM press conference, even the media contingent was down this year and there’s only been one comprehensive colour piece filed on line by the Democrats-friendly Media Matters website.
I walked out of the meeting thinking that Murdoch’s comments on everything from Fox News to David Cameron, phone hacking, retirement, his pay and campaign finance would generate quite a buzz in New York City.
Alas, there wasn’t a single word in any of the print editions of the Wall Street Journal, New York Post and New York Daily News on Saturday morning. The New York Times ran a small item on the political donations and it was only The Financial Times that covered the field comprehensively in this page lead.
You would expect the Murdoch-owned titles to potentially self-censor what was arguably Murdoch’s worst AGM performance of all time, but why wouldn’t The New York Times report that Murdoch hadn’t even read their 5000-word investigation into the UK phone-hacking scandal.
Murdoch himself doesn’t seem to understand the first thing about the scandal. This is what he said:
“We have very, very strict rules. There was an incident more than five years ago. The person who bought a bugged phone conversation was immediately fired and in fact he subsequently went to jail. There has been two parliamentary inquires, which have found no further evidence or any other thing at all. if anything was to come to light, we challenge people to give us evidence, and no-one has been able to. If any evidence comes to light, we will take immediate action like we took before.”
The scandal is not about “bugged phone conversations” but rather hacked voicemail messages. There were no listening devices involved. If the New York Times can unearth 12 different former editors and reports at Rupert’s British tabloids who vouch for the fact the practice was widespread, how can Rupert remain in complete denial?
It really is a case of “see no evil, hear no evil” for Rupert and his directors. A copy of Bruce Guthrie’s Man Bites Murdoch was placed on the table where Rupert was sitting but he departed straight after the AGM without even looking at it.
How on earth can Rupert sit down with John Hartigan and Peter Blunden when he visits Australia next week without even looking at the most comprehensive public account we’ve even seen of their eccentric management styles?
When asked if any of them had read Bruce Dover’s book, Rupert’s Adventures in China, not one of the 14 directors in the room raised their hand. That’s either negligence or they’re too scared to admit it publicly.
*Read the full transcript of Stephen Mayne’s 12-minute exchange with Rupert, plus the audio highlights
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