James Murdoch Survives Shareholder Mutiny at Sky

Leo Barraclough

A majority of independent shareholders at European pay-TV operator Sky voted against the reappointment of James Murdoch as a company director Thursday. Murdoch, who is Sky’s chairman, was saved by votes from its largest shareholder, 21st Century Fox.

Some 50.6% of independent shareholders voted against Murdoch, but when the votes from 21st Century Fox were taken into account, his reappointment was approved by 71.55%. 21st Century Fox has a 39.14% stake in Sky and controls 37.19% of votable shares.

The vote against reappointment was spurred by concerns that as Murdoch is CEO at 21st Century Fox, he is not independent, and his role as chairman poses a major conflict of interests. 21st Century Fox has previously attempted to take full control of Sky, and may do so again.

Sky said it would “engage” with those who voted against him, but expressed the belief that by having an independent director as deputy chairman, Aberdeen Asset Management CEO Martin Gilbert, and Andrew Sukawaty as senior independent director, the board had protected the interests of independent shareholders. Six of the 11 board directors are independent.

“The board notes the significant vote against resolution 11, the re-election of James Murdoch as a non-executive director, and is aware that some proxy advisory services recommended that shareholders vote against his election on the basis that he is not independent,” Chris Taylor, company secretary, said in a statement, referring to calls by Sky shareholder Royal London Asset Management and shareholder advisory firm Pirc for Murdoch to be removed from the board.

“The board decision to re-appoint James as chairman was unanimous and recognized that he is a highly experienced executive with extensive knowledge of the international media industry and has been a strong contributor to Sky since he joined the board in 2003.

“The board is confident that with the appointment of Martin Gilbert as deputy chairman and Andrew Sukawaty as senior independent director, there are strong governance processes in place to protect the interests of independent shareholders. Nevertheless, we will engage with those shareholders who voted against the resolution.”

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