Murdoch appointment raises questions

APPOINTING family members of major shareholders to key positions in plc’s reinforces the need for independent directors to maintain shareholder confidence, according to Irish investment managers.

Ann Fitzgerald, the secretary general of the Irish Association of Investment Managers (IAIM), spoke amid speculation British Sky Broadcasting (BskyB) was to appoint its new chief executive last night.

The satellite broadcaster that operates the Sky TV channels and is chaired by media baron Rupert Murdoch was expected to appoint Murdoch’s son, James, as chief executive.

Murdoch’s appointment faced opposition from a number of the company’s institutional shareholders. Some shareholders ask if Murdoch, aged 31, is the best person for the job, vacated by Tony Ball in September. Murdoch’s father owns 34% of the company.

Fitzgerald said it would be unfair to rule out a suitably qualified, high-calibre candidate for a top job purely because they were related to a major shareholder. It was necessary to handle appointments of this nature with care.

The best way to counter claims of favouritism would be to have appointments ratified by a board that was perceived as independent and acting in the best interests of the company and all its shareholders.

The Irish investment community sees parallels between the BskyB appointment and Ireland’s Independent News & Media, where Gavin O’Reilly is widely seen as a likely future chief executive.

Mr O’Reilly is the son of Tony O’Reilly, the current executive chairman of Independent, who owns approximately 27% of the company. Tony O’Reilly Junior is currently chief executive of the ceramics division of Waterford Wedgwood, in which his father has a similar stake.

Ms Fitzgerald said the IAIM had successfully lobbied Irish companies to improve their corporate governance procedures in recent years.