LONDON (Reuters) - BSkyB's independent directors unanimously backed James Murdoch as chairman on Friday in a letter addressing shareholders' concerns about his suitability following the phone-hacking scandal at the News of the World.
The endorsement came a day after Murdoch was grilled by British lawmakers for a second time about his role in overseeing the now-defunct tabloid, owned by the News International group that fell under his News Corp remit.
The 38-year-old son of media mogul Rupert Murdoch held his line that he was innocent of covering up the scandal, but he could give no reason why he did not ask more questions, particularly in approving a huge payoff to a victim.
The disclosures have raised questions about Murdoch's integrity and his ability to continue to be effective in his role at BSkyB. [ID:nL3E7MA0V9]
BSkyB's independent directors said Murdoch had done a "first class job" in leading an effective board, in the letter, a copy of which was sent to Reuters.
Nick Ferguson, BSkyB's deputy chairman, acknowledged the speculation about Murdoch's integrity but said he would only deal with substance.
"We've also considered whether there would be any negative reputational effect on the company, as a result of the News of the World issues," he said.
"We have seen no effect on sales, customers or suppliers over the last five months."
Murdoch has already been damaged by the scandal, however, and only managed to cling onto his board position at News Corp last month through the support of the Murdoch family.
One BSkyB activist shareholder group had earlier on Friday called for investors to oust Murdoch, saying such a move was needed to distance BSkyB from the phone hacking scandal.
Reporting by Rosalba O'Brien and Paul Sandle; Editing by Jon Loades-Carter