James Murdoch, BSkyB and the issue of honour – Telegraph

by peterjukes

Mr Murdoch is grappling with a response and, I believe, wavers between the two positions. Inside, he has a burning sense that his integrity has been wrongly questioned and that therefore he has no reason to go.

To bow to his enemies would be tantamount to an admission of guilt and would leave other board members who have backed him horribly exposed.

On the other hand, as he divests himself of his other board duties at Sotheby’s and GlaxoSmithKline, a strong case could be made that it would be better to exit BSkyB as well.

Close observers of the situation say that although the committee is unlikely to accuse Mr Murdoch of deliberately misleading them, they will surely raise concerns about the fact that Mr Murdoch did not appear to check the key email sent to him in 2008 by two senior executives at News International regarding phone hacking allegations.

Mr Murdoch said he did not read the email because he was “alone with his children” and therefore too busy. This has the faint whiff of the “dog ate my homework” defence. Harry S. Truman had a sign on his desk: “The buck stops here”. Mr Murdoch should consider where ultimately the buck stopped at News International.

As he considers what to do, I think Mr Murdoch is maybe confusing two things. One is the truth, or otherwise, of the allegations against him. The second is whether he should stay as chairman of BSkyB.

Excluding votes cast by News Corporation, only 55pc of the independent shareholders backed Mr Murdoch as BSkyB chairman at the annual general meeting last November. As one of the shareholders that voted against, Legal and General, made clear in private, this wasn’t about Mr Murdoch’s integrity, it was about whether someone so compromised by his links to News International could rightly continue at BSkyB. It was a question of governance, not honesty.

Mr Murdoch should see the issue through the same prism. The BSkyB board should also consider whether the constant scrutiny of their chairman over issues that are nothing to do with the broadcaster are helpful to the good operation of BSkyB. Would a non-executive representative of News Corp and an independent chairman be a more robust structure beyond criticism? In Nick Ferguson, presently the board senior independent non-executive director, they have a ready-made replacement, even if only temporary.

This week, both the BBC’s Panorama and PSB in America (both publicly funded broadcasters with a scratchy attitude to BSkyB’s private sector success) are planning to broadcast programmes making fresh allegations about the News Corp empire. Mr Murdoch will certainly spend much of April in the news.

If he does not decide to go himself – walking out of the front door rather than being pushed out – Mr Murdoch will rely on the few big institutional investors in BSkyB that still back him. If that changes, then Mr Murdoch will no longer have to make a decision. It will be made for him.

via James Murdoch, BSkyB and the issue of honour – Telegraph.