Murdoch shareholders should vote with their feet

The News Corporation AGM in Los Angeles went off with barely a hitch on Friday. Rupert was apparently his normal combative self. There was the usual words of contrition in relation to phone hacking and everything was voted through on the nod.

Rupert reigns supreme. The most compliant board of directors in corporate history remains in place. The façade of proper governance continues.

All this despite various institutional shareholders sabre rattling in advance and attempting to vote down the re-election of various directors. Christian Brothers Investment Services (CBIS) for example, tabled a resolution to separate the roles of chairman and chief executive, positions currently held by Rupert, and instead replace them with an independent chairman. It was rejected.

In fact, some of the world's largest investors voted against his re-election, and that of his sons, to the News Corp board. They also did not approve of the $33m (£21m) he was paid as chairman and chief executive this year.

None of this matters one jot. Murdoch owns 12 per cent of the company but controls about 40 per cent the votes because of News Corp's two classes of shares which ensure that the Murdoch family can vote down anything it doesn’t like. Pity the poor institutional shareholder.

Well no not really, in fact it is difficult to have any real sympathy for the institutions on this one because they are trying to have it both ways. They want to have their cake and eat it (I’ve never understood that phrase, I mean what else are you supposed to do with cake?). The institutions want influence, but they also want the money ie. dividend and capital growth.

The problem is they all knew what News Corp was like when they signed up and they knew that influence and proper corporate governance were not on offer. It’s all a bit late to start bleating now!

Of course if they really feel strongly about this they could vote with their feet and sell their shares en masse, but that would mean they wouldn’t get the money - oh damn!