Like son, like father?
Since BSkyB was founded, it has been chaired by either James Murdoch or his father, Rupert. Murdoch Jnr’s decision to jump before he might have been pushed means the pay-TV group finally has an independent chairman.
BSkyB is better off without a Murdoch in the chair. Although Murdoch Jnr did a reasonable job first running and then chairing the group, his track record overseeing the Murdochs’ UK newspaper business was far from stellar. He failed to get on top of the swirling phone hacking and bribery scandal. He may well be criticised by the UK parliamentary committee investigating the issue.
The failure to get a firm grip on the scandal has attracted such a torrent of negative publicity that Murdoch Jnr had ceased to be an asset for BSkyB even though it is a totally different business. But this, in turn, has provided an opportunity for BSkyB to build a board that conforms to classic corporate governance standards. Unless there are strong reasons to the contrary, it is best for public companies to have an independent chairman.
The scandal has already cost News Corp, the Murdoch-controlled U.S.-listed media group, the chance to buy out the 61 percent of BSkyB it does not already control. Ofcom, the UK media regulator, is now investigating whether News Corp is fit and proper to continue even with its current 39 percent stake. The fact that there is no longer a Murdoch in the chair may take a little of the edge off this probe. But James Murdoch is still a director. A forced divestiture is now no longer unthinkable, though it is still pretty unlikely.
The same goes for replacing Murdoch Snr as chairman of News Corp. Last month Christian Brothers Investment Services tabled a shareholder resolution calling for the company to have an independent chairman, arguing that the UK newspaper scandal raised concerns about inadequate oversight. It may be unlikely to winkle Murdoch Snr out of the News Corp chair since he speaks for 40 percent of the votes. But then again, pretty much the same could until recently have been said about Murdoch Jnr at BSkyB.