UPDATED: News Corp’s new independent director Breyer not so, says investor
Updated with official News Corp response below.
We don’t know what quite to make of this but CtW Investment Group, a union-affiliated shareholder lobbyist, is raising a stink about News Corp’s new independent director appointment, Accel Partners’ Jim Breyer.
CtW, which claims its affiliations represent pension funds of some 5.5 million Americans or some $200 billion in assets, says Breyer, a venture capitalist best known as an early investor in Facebook, isn’t as independent as the board claims.
In a 1,400-word letter addressed to Viet Dinh, chair of News Corp’s nominating & corporate governance committee, CtW lists a range of claims about Breyer’s relationships with News Corp, the Murdochs and his record as a director with major names like Wal-Mart and Dell.
A few highlights include:
– News Corp’s “close business relationships” with Accel Management Inc, of which Breyer is a partner
– An Accel investment in a MySpace subsidiary that employed Wendi Murdoch, wife of CEO Rupert Murdoch
– Breyer and Mrs Murdoch were co-investors in Art.sy, an art discovery and shopping site
– Breyer has been reported to “spend considerable time” with Rupert Murdoch
– Accel and Wal-Mart have engaged in at least two transactions which appear to violate NYSE’s independence standards during Breyer’s tenure as a director at the retailer
And on it goes with other claims.
CtW says there’s an extensive interconnection between Breyer and Accel and News Corp, News Corp employees and the Murdochs. CtW already had News Corp’s CEO succession plan in its sights before the phone-hacking scandal broke, according to Research Director Richard Clayton.
“We are very concerned that, following more than four years of inaction that allowed a burgeoning internal crisis to go unaddressed, News Corp’s board is once again acquiescing to management’s priorities in nominating directors and failing to disclose needed information to shareholders. The selection of Mr. Breyer, who has no investigative experience, no regulatory or law-enforcement background, and no track record of strong, independent leadership at the boards on which he served, adds nothing to the board’s ability to root out any corrupt and illegal practices or determine how they seemingly went unchecked for so long.”
News Corp initially didn’t official responded to CtW preferring to point out why CtW was wrong on background with journalists, but eventually it put out this statement late on Friday evening.
“News Corporation’s Board of Directors thoroughly reviews its nominees with respect to NASDAQ listing rules and is confident in Mr. Breyer’s independence.”
Specifically, on the issue 0f Breyer investing in MySpace China while Wendi Murdoch was an advisor, a source close to company reminded us MySpace China is not owned by News Corp.