Elisabeth Murdoch not joining News Corp board

NEW YORK Fri Aug 5, 2011 7:41pm EDT

News Corp Chief Executive Rupert Murdoch (R) talks to his daughter Elisabeth Murdoch at Cheltenham Festival horse racing meet in Gloucestershire, western England March 18, 2010. REUTERS/Eddie Keogh

News Corp Chief Executive Rupert Murdoch (R) talks to his daughter Elisabeth Murdoch at Cheltenham Festival horse racing meet in Gloucestershire, western England March 18, 2010.

Credit: Reuters/Eddie Keogh

NEW YORK (Reuters) - Rupert Murdoch's daughter Elisabeth will not be joining News Corp's board as had been planned, after criticism that the board was populated by corporate and family insiders.

It is the latest fall-out after a phone-hacking scandal led News Corp to close its UK newspaper, News of the World.

"The independent directors agreed that the previously planned nomination should be delayed," they said in a statement.

Elisabeth Murdoch had suggested to independent directors at this year's annual general meeting weeks ago that she felt it would be inappropriate for her to join the board, according to the statement.

"Both Elisabeth and the Board hope this decision reaffirms that News Corp aspires to the highest standards of corporate governance and will continue to act in the best interests of all stakeholders," the statement from director Viet Dinh added. Dinh, a Georgetown University law professor and former Assistant Attorney General of the United States, chairs News Corp's nominating and corporate governance committee.

The news was first reported by the Wall Street Journal, which is owned by News Corp.

News Corp said in February that Elisabeth Murdoch, 42, would be joining the board in 2012 after the $673 million (410 million pounds) acquisition of her TV production company, Shine Group.

Some corporate governance watchers had highlighted the acquisition as an example of nepotism and said Murdoch senior overpaid for his daughter's London-based company.

In March the Murdoch-controlled board was sued by a shareholder group for approving an "unfairly" priced deal.

Murdoch, 80, who founded the company and is also chief executive, and his sons James, 38, and Lachlan, 39, also sit on the board.

The 16-person board has been criticized by corporate governance watchers like GovernanceMetrics International for its lack of independence. It includes seven insiders -- either Murdochs or current employees of News Corp. Other directors are long-time close associates of Murdoch or former employees including Rod Eddington and Kenneth Cowley.

(Reporting by Yinka Adegoke; Editing by Gary Hill)