Elisabeth Murdoch rejects News Corp board

Elisabeth Murdoch rejects News Corp board

It's fascinating to watch what's happening now on the board of Rupert Murdoch's News Corporation.

First we have reports that his daughter Elisabeth Murdoch has shelved plans to join the News Corp board following criticism that the board was populated by corporate and family insiders. This is the latest fall-out from the phone-hacking scandal that led News Corp to close its UK newspaper, News of the World, but it goes deeper than that.

She was expected to join the board after her father bought Shine Group, the television-production company she established. She had agreed to join the board.

Significantly, two investment funds have sued News Corp, claiming that the Shine transaction was "nepotistic" and cited evidence of Mr Murdoch using the company as a "family candy store". While the Murdoch family has about 12 per cent of News Corp's equity, it has about 40 per cent of the voting rights at annual meetings through a dual-class share system.

Clearly, Elisabeth Murdoch is trying to distance herself from the board and, by extension, her father. This decision will protect her from legal and regulatory issues around the company. She obviously expects these issues are not going to go away, and are going to get worse.


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