MEDIA & MARKETING: AMONG THE Leveson Inquiry witness statements worth reading is that of Richard Peppiatt, a former reporter at the Daily Star whose resignation letter poetically cited a “cascade of shit” that he saw pirouetting from the penthouse office of proprietor Richard Desmond, “caking each layer of management, splattering all in between”.
Peppiatt begins his statement by dryly describing corporate governance at his former employer as “laissez-faire at best”. But while ethical concerns at Desmond’s Northern Shell media group may or may not be “always subservient to financial ones”, 2011 has brought increasing visibility to the shareholder groups for which ethical concerns are often synonymous with financial ones.
Public companies will ultimately be less able than a single-owner company like Northern Shell to adopt laissez-faire attitudes to corporate governance – because if they do, they may simply find themselves subject to the corporate governance standards of their investors instead.
On Tuesday, News International chairman James Murdoch faced an embarrassing protest vote against his re-election as chairman of BSkyB. With the help of the 39 per cent of BSkyB (and 37 of the voting shares) that is owned by News Corporation, Murdoch was re-elected with just 81.2 per cent of the vote.
To put this number in context, according to Pirc, Europe’s largest independent proxy adviser, only 1 per cent of FTSE 350 executives facing elections this year were opposed by 15 per cent or more of shareholders.
Around a third of independent shareholders voted to remove Murdoch, and around 45 per cent either voted against or abstained.
(Excerpt from an article by Laura Slattery, The Irish Times)
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