The following comments were made by Tim Shaler, Investment Advisor at CBIS, at the Twenty-First Century Fox Annual Meeting, held in Los Angeles on October 18, 2013:
Good morning Mr. Murdoch, members of the board, staff, and fellow shareholders. My name is Tim Shaler and I am an Investment Advisor with Christian Brothers Investment Services, a faith-based socially responsible investment firm with 499,000 Class A and 547 Class B shares of 21st Century Fox.
The resolution co-filed by Christian Brothers Investment Services and The British Columbia Investment Management Corporation with support from the Local Authority Pension Fund Forum requests the board of directors adopt a policy that the Chairman be an independent director, an urgent first step toward improving the quality of this company’s board.
The separation of the company into News Corp and 21st Century Fox presents a unique opportunity to change the current leadership structure which is an impediment to a strong, independent board, whose primary job is to monitor management on behalf of all shareholders.
While some steps have been taken in the wake of the phone-hacking scandal, the company will continue to be closely associated with the scandal for some time yet as the trials of those charged with illegal activity begin and the criminal investigations continue. Appointing an independent Chair will give shareholders more comfort that real oversight of the executive team is being exercised.
This issue is so pressing that the resolution has been supported by prominent pension funds like CalPERS, CalSTRS, and the Florida State Board of Administration, by leading proxy voting firms ISS, Glass Lewis, and PIRC, and by Class A shareholders with $1.9 trillion in assets and 66 million shares.
In a strong show of support for this reform, last year approximately two-thirds of independent shareholders voted in favor of this resolution.
For the board to ignore such an overwhelming shareholder mandate shows clear disregard both for shareholders and for corporate governance.
In a recent statement the company noted that it had made “significant improvements” in its corporate governance and compliance policies. We hope this is the case. The Compliance Standards Committee did commit to train employees, implement a whistleblower policy, and conduct audits, among other positive measures. We encourage the board to commit to report to shareholders every year on the effectiveness of these policies in an effort to regain shareholder trust.
We hope that the corporate governance problems at News Corp are not just being repeated at Twenty-First Century Fox. The new company deserves a fresh start, with proper oversight and adequate controls on power.
We hereby urge the board to appoint an independent Chair at 21st Century Fox who is responsive to shareholder concerns and who will implement the necessary reforms to take this company into the 21st Century.