Tech guru may be best hope for News Corp holders
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
NEW YORK –The best hope for News Corp shareholders may be Thomas Perkins. The renowned American venture capitalist is the closest thing to a truly independent director amid the roster of Rupert Murdoch cronies. Perkins also has some relevant experience: he quit the board of Hewlett-Packard five years ago over a phone-hacking scandal. That makes him a prime candidate to lead the charge for a badly needed overhaul of News Corp’s governance.
News Corp shares have tumbled 14 percent over the last week, as phone-hacking and other malfeasance at the News of the World brought the abrupt closure of the UK tabloid paper and then raised the specter of News Corp losing its grip on BSkyB, the British satellite TV group. Though shareholders bought in knowing that Murdoch calls the shots, they’re still entitled to expect independent directors to fight their corner.
The company needs a fully independent inquiry into what happened, a critical assessment of its current businesses and strategy and an objective review of governance, among other things. Yet there isn’t much non-partisan thinking to be found on the News Corp board. Though nine of the 15 directors up for election last August met Nasdaq’s standards for independence, they mostly don’t really reflect the word’s meaning.
Kenneth Cowley ran a News Corp division for years and has served on the board for over three decades. Andrew Knight was chairman of News International, the division now under scrutiny, before becoming a director in 1994. John Thornton, now a professor in China, helped win business from Murdoch when he was president of Goldman Sachs. Few of the supposed independents lack a history with News Corp or its boss. Jose Maria Aznar, a former prime minister of Spain, hardly seems likely to take a stand, either.
So the responsibility may fall on Perkins’ shoulders. His own phone records were hacked when Patricia Dunn, then chairman of HP, hired investigators to uncover board leaks. He resigned, later talking of “the questionable ethics and the dubious legality” of the methods used. Perkins, a founder of Kleiner Perkins Caufield & Byers, also used the episode as a platform to rail against tick-the-box corporate governance, which he said was increasingly substituting for judgment. News Corp’s mess provides him a perfect opportunity to lead his fellow independent directors in practicing what he preached.