November 7, 2007 / 10:59 PM / in 12 years

UPDATE 1-Experts question Bancroft choice for News Corp

(Adds Rupert Murdoch comment on Natalie Bancroft)

By Martha Graybow

NEW YORK, Nov 7 (Reuters) - News Corp NWSa.N is considering adding a young opera singer who hails from the wealthy family that has long controlled Dow Jones & Co. Inc DJ.N to its board, but business experts said she may lack the financial acumen.

Corporate governance experts also question whether a member of the Bancroft family that is selling its stake in Dow Jones to News Corp belongs on the media conglomerate’s board at all.

“A board seat isn’t something to be given away,” said Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. “It’s there to monitor management for shareholder benefit.”

News Corp confirmed on Wednesday that it is considering adding Natalie Bancroft, a 27-year-old who lives in Europe and has studied opera, as an outside director.

The Bancroft family argued over whom to pick for the board seat, and missed a deadline to nominate a candidate. That ultimately gave the choice to Chairman and Chief Executive Rupert Murdoch, according to a report in The Wall Street Journal, which Dow Jones owns.

“They’re a funny family, and they couldn’t decide between themselves who to nominate, and that’s about all I can say,” Murdoch said on a conference call on Wednesday to discuss news Corp’s quarterly results. “So we went through it and by a process of elimination, speaking to people, we chose Natalie, and we’re looking forward to having her as a colleague.”

News Corp struck a $5.6 billion deal to buy Dow Jones this summer after months of negotiations with the Bancrofts.

If appointed, Natalie Bancroft would be the lone woman on the board, which includes former Spanish President Jose Maria Aznar and venture capitalist Thomas Perkins.

Natalie Bancroft was unavailable for comment. In an interview with Reuters on Tuesday, her father, Hugh Bancroft III, said that Natalie Bancroft has lived in Geneva and studied opera.

Nell Minow, co-founder of the Corporate Library, a research group that tracks companies’ governance practices, said she questioned whether Natalie Bancroft was up to the job.

“There are no training wheels in boardrooms and she is supposed to be up and running on day one,” Minow said. “It may be that she is a quick study and she is going to throw herself into this and learn all about accounting and SEC filings. It may be that they put her on the committee that plans the Christmas party and call it a day.”

Murdoch called the experts’ opinions “rubbish.”

“If you listen to corporate governance issues, just remember what they said when Google floated. They said (it) was the worst corporate governance model they had ever seen,” he said.

Governance experts say that directors should be financially literate and understand documents such as a balance sheet or cash flow statement.

Outside board members are charged with being shareholder watchdogs who oversee a company and its management.

Directorships were once largely seen as plum jobs handed out to corporate chiefs’ friends as well as to celebrities, regardless of their financial expertise. U.S. football player O.J. Simpson, for instance, once sat on the two-person audit committee of Infinity Broadcasting.

But experts say that boards today are much more concerned with appointing accomplished businesspeople with vast auditing and financial experience to their boards.

Diversity is also important, said Dan Heitger, an associate professor at the Farmer School of Business at Miami University of Ohio who specializes in governance matters.

Adding younger people to the News Corp board could be a wise move, because media companies are trying to find ways to better court younger viewers and readers. Still, it’s important to add the right person, he said.

As a News Corp official, “I would be prepared to answer why was this person chosen for the board, what unique perspective will this person bring?” he said. (Additional reporting by Kenneth Li and Robert MacMillan; Editing by Gary Hill, Leslie Gevirtz)

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