Sky Hires Rothschild to Cool Incandescent Investors
James Murdoch, thirty year-old younger son of News Corporation chairman Rupert Murdoch, on Monday bested all other candidates for the vacant post of ceo at Britain's largest pay-TV operator BSkyB.
So clear was his suitability for the job that not one of the other candidates received a single vote from the four-strong Sky nominations committee or the eleven non-executive members of the Sky board.
At the same time as confirming the controversial appointment, BSkyB hired an influential member of another dynasty to pour oil on troubled investor waters. Nathaniel Charles Jacob Rothschild, fourth Baron Rothschild, no less, was appointed in a bid to cool it with incandescent investors.
But despite the unanimity of the vote to appoint James, there were four abstentions.
Confident he could rely on the judgement of his Sky colleagues to choose the right candidate Rupert Murdoch, who also doubles as BSkyB's executive chairman, diplomatically refrained from voting. Also in Caesar's wife mode were three other Sky directors (Chase Cary, David DeVoe and Arthur Siskind) - all board members of US parent company NewsCorp.
As to the actual selection procedure, BSkyB non-executive director Allan Leighton, fresh from his skirmishes with Britain's postal workers union (he is also part-time chairman of Royal Mail) assured: "In terms of independence and governance I think it's a role model of how it should be done."
Chairman Murdoch declared his pleasure at the appointment: "The Board and I are pleased that the Nomination Committee has completed its task and it is unanimous in its conviction that James is the right man for this job."
But many shareholders were less enthused. James' appointment, said Peter Montagnon, head of investment affairs at the Association of British Insurers, would require "a really compelling explanation". Although acknowledging Murdoch minor's capabilities, Montagnon said it stretched credibility that a 30 year-old has the experience to run a business capitalised at £12.9 billion.
Iain Richards, joint head of corporate governance at major Sky shareholder Morley Fund Management, said his firm was "clearly dismayed", though not surprised, by the appointment. Richards is expected to oppose the re-election of eight of the 11 non-executives on the board not deemed to be independent. A "token gesture of a couple of new independent directors would be clearly inadequate", he opined.
Data sourced from: Financial Times; additional content by WARC staff