|
British sky broadcasting named murdoch kid executive { November 5 2003 } Original Source Link: (May no longer be active)
http://www.nytimes.com/2003/11/05/business/worldbusiness/05stjohn.htmlhttp://www.nytimes.com/2003/11/05/business/worldbusiness/05stjohn.html
November 5, 2003
BSkyB Defends Naming of Younger Murdoch
By HEATHER TIMMONS
LONDON, Nov. 4 - The tempest surrounding James Murdoch's rise to chief executive of the British Sky Broadcasting Group can be attributed to overheated shareholder activism and longstanding anti-Murdoch sentiment in Britain, a senior member of the company's board said on Tuesday.
The new chief executive, James Murdoch, who took the reins of BSkyB on Tuesday, was "infinitely superior" to the other six candidates interviewed, the board member, Lord St. John of Fawsley, said in a telephone interview. Rupert Murdoch, James's father, is chairman of BSkyB.
In addition, Lord St. John said, "interventions" by executives of the News Corporation contributed to the unease of shareholders. Executives, including Rupert Murdoch, said publicly during the search that they thought James was the best candidate, upsetting shareholders concerned about the integrity of the search.
"From his father, I suppose one could say that was just being a proud parent," Lord St. John said, but the remarks of the other executives "made our task much more difficult."
The candidacy of James was challenged by shareholders who questioned the way the search was conducted and the power that Rupert might gain if his son was elected. The News Corporation owns 35 percent of BSkyB, one of Britain's largest media companies.
Lord St. John, who led the nominating committee that appointed James, has already been criticized by the investors who own the remainder of BSkyB. Many shareholders said that even before the selection of James that they might vote Lord St. John off the board at the company's annual meeting, scheduled for Nov. 14.
His most recent remarks won him no new supporters.
Investor scrutiny of BSkyB was intense, Lord St. John said, because Britain has always had a jealous dislike of Rupert Murdoch and the News Corporation.
The News Corporation owns several newspapers in Britain, including The Times of London and The Sun, which have increasing political clout. Rupert Murdoch is "one of the most remarkable people in the postwar world," Lord St. John said.
The newfound power that British shareholders are exercising is "becoming ridiculous," he added, and may prevent boards and management from doing their jobs.
BSkyB investors responded to Lord St. John's comments by saying that they were proof that he is no longer fit to be a director.
"I find that a very disappointing attitude to be taking, especially with institutions who believe they are acting in the best interest of shareholders," said Robert Talbut, chief investment officer at ISIS Asset Management, which has been critical of the search for a new BSkyB chief.
British shareholders have been bolstered by so-called Higgs guidelines, which ask companies to separate the chairman and chief executive roles and to increase the number of outside directors.
Lord St. John said the new activism was becoming an encumbrance to managers. "What do these silly people think they're doing by attacking the company for unenforceable, theoretical rules?" Lord St. John added.
Corporate governance advocates, not surprisingly, disagreed. Compliance with the Higgs guidelines is part of the listing rules in Britain, Leoni Edwards, a spokeswoman for the Association of British Insurers, said.
BSkyB has been less than cooperative, Ms. Edwards said. "We always hoped to have a dialogue with the company that was not always reciprocated."
Lord St. John said that irate investors would soon be silenced by the performance of James Murdoch. He "has a passion about him for this work," Lord St. John said. "In a short time, you won't hear any criticism."
Copyright 2003 The New York Times Company
|
|
