* Resolution could pressure board to cut Murdoch role
* Christian Brothers brought resolution at 2011 meeting
* News Corp director Dinh: No obligation to hate each other
By Ross Kerber and Aruna Viswanatha
BOSTON, April 2 News Corp faces a call
to appoint an independent board chairman on concerns Rupert
Murdoch's media company needs to pursue more reforms to deal
with its phone-hacking scandal and other issues.
The proxy proposal, filed by Christian Brothers Investment
Services, is likely to fan an ongoing controversy over
governance at the company.
Although unlikely to get a majority of votes, the nonbinding
resolution filed last month could put pressure on the board to
remove Murdoch, currently News Corp's chief executive, from his
other role as chairman of the company, the sponsor said.
With current arrangements, the company is "stepping into the
scandal with a flawed corporate governance structure," Julie
Tanner, who oversees socially responsible investing at Christian
Brothers in New York, said in a telephone interview.
A News Corp spokesman declined to comment.
Separately, News Corp director Viet Dinh spoke on a panel on
corporate boards at a Washington, D.C. event on Monday and
defended his role overseeing an internal probe into allegations
of bribery and phone-hacking.
Dinh acknowledged he is godfather to one of Murdoch's
grandchildren, but said that should not make him less than
"The key measures beyond the technical requirements of law
is how you interact, how you act as a director, that is where
true independence comes from," said Dinh, a former Justice
Department official, speaking at an event sponsored by the
Council of Institutional Investors.
"There is no obligation that we hate each other to be
serving on the same board."
TARGETING INDEPENDENT CHAIRS
Christian Brothers manages about $4 billion, mainly for
Catholic institutional clients. It is among a group of activists
gaining traction in their drive to reform corporate governance.
Last year, pressure from Christian Brothers convinced Goldman
Sachs Group Inc to make the leading board role of
presiding director more powerful.
This year, groups allied with Christian Brothers' work have
made independent chairmen a priority for shareholder
resolutions. The highest-profile is the American Federation of
State, County and Municipal Employees, which recently won
further changes from Goldman Sachs Group Inc and has targeted
other companies, including JPMorgan Chase & Co and Janus
Under Murdoch, News Corp has grown to become one of the
world's most powerful media companies, but also has drawn
increasing scrutiny over news-gathering practices at some of its
publications and questions about how much senior executives knew
of abuses. Last week, it also faced reports that one of its
television units had promoted piracy attacks on rivals, which
the company denied.
Matters came to a head last July when News Corp abruptly
closed the News of the World tabloid amid scrutiny of the use of
private investigators, and several top News Corp executives
The events happened too late for Christian Brothers to file
a proxy proposal related to corporate governance in time for
News Corp's 2011 annual meeting, held in October, Tanner said.
But Tanner was able to offer a floor resolution at the 2011
meeting calling for an independent chair. Though it got few
votes, it gained support from the proxy advisory firm Glass
Lewis and public-sector investors such as the UK's Local
Authority Pension Fund Forum.
Noting that support, and significant opposition from
shareholders to the election of four directors last year, Tanner
said she hoped the recently filed measure might gain more than
30 percent support at the meeting expected this fall. Such
support could lead News Corp's board to reduce Murdoch's role,
"I think a very strong vote will put them in a position
where they should take some kind of action," she said.