Rupert Murdoch has long been a control-freak who, as the notorious poison-pill episode demonstrated, is paranoid about his family losing power over News Corporation.
Dealing with the company is like pulling teeth when it comes to corporate governance and shareholder voting, so it was no surprise that Rupert has dodged a contest when he faces a re-election ballot for the first time in decades later this year. For the third time in four attempts, Rupert has knocked back my board nomination.
Whilst accepting that this year’s nomination was “timely”, Rupert has called on his New York lawyers, Hogan & Hartson, to once again write to the Securities Exchange Commission seeking permission to reject the bid on the following grounds:
Rule 14a-8(i)(8) permits exclusion of a stockholder proposal “if the proposal relates to an election for membership on the company’s board of directors.” The Commission has stated that the principal purpose of the rule is “to make clear, with respect to corporate elections, that Rule 14a-8 is not the proper means for conducting campaigns of effecting reforms in elections of that nature, since the proxy rules … are applicable.” Release No. 34-12598 (July 7, 1976). The proponent’s proposal to nominate her husband, Mr Mayne, “to stand for the board of News Corporation at the forthcoming 2007 annual meeting of stockholders in New York” clearly falls within the plain meaning of Rule 14a-8(i)(8) and thus could be excluded.
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It’s a contentious tactic as this recent letter from the American Bar Association to the SEC demonstrates.
The hilarious thing about News Corp’s approach is that when I did run for the News Corp board in 2002, Rupert refused to run any of the platform or even tell the shareholders my age. This was the worst censorship I’ve encountered in 26 corporate board tilts.
It seems the Americans don’t allow any campaigning material to be distributed to shareholders, so why didn’t Rupert simply reject the platform just like he did in 2002, but still include me in the ballot?
As usual, the letter advising of deficiencies in the nomination arrived after the deadline had closed. I’ve asked Amy Freed from the Third Avenue law firm and News Corp company secretary Laura O’Leary to confirm that my separate shareholder resolution on eliminating the non-voting shares is okay to proceed.
So far, they’ve declined to respond so I suspect Rupert has ordered them to try and figure out a way to squeeze out of this one, too, but they’re finding it a little more difficult.