The Church of England’s (CofE) investment bodies have sold their shares in News Corporation – worth £1.9 mn ($2.9 mn) – on the advice of its Ethical Investment Advisory Group (EIAG).
The EIAG raised concerns with News Corp over the need for governance reform a year ago after the media organization’s tabloid newspaper the News of the World admitted widespread phone hacking.
‘Our decision to disinvest was not one taken lightly and follows a year of continuous dialogue with the company, during which the EIAG put forward a number of recommendations around how corporate governance structures at News Corporation could be improved,’ comments Andrew Brown, secretary of the Church Commissioners, one of CofE’s investment bodies, in a statement.
‘But the EIAG does not feel [News Corp] has brought about sufficient change and we have accepted [the EIAG’s] advice to disinvest.’
The EIAG wrote to News Corp last year following its decision to close the News of the World, saying the closure was not a ‘sufficient response’ and calling on the company’s CEO and chairman Rupert Murdoch to do whatever it takes to ‘instill investor confidence’ in ‘ethical and governance standards’
Since then, James Murdoch, Rupert Murdoch’s son, has resigned as chairman of News International, the publishing arm of News Corp in the UK. News Corp has also announced plans to split its publishing and entertainment businesses into separate companies, a move favored by many investors.
The EIAG is an independent group that advises CofE’s three investment bodies on governance and ethical investment issues and conducts engagement with companies on their behalf. It met with 40 companies that were ‘prioritized for engagement’, including News Corp, between April 2011 and March 2012, notes CofE in the statement.
CofE already excludes investment in companies involved with military products and services, pornography, alcoholic drinks, gambling, tobacco, human embryonic cloning and high-interest-rate lending.
News Corp is expecting trouble at its annual meeting in October after a consortium of high-profile investors ‒ including Legal & General, Aviva and the Co-operative Asset Management ‒ backed a motion calling for the removal of Rupert Murdoch as chairman and the appointment of an independent chair.
