25th October 2011
According to the Financial Times, the result of a ballot of News Corp shareholders called by investors opposed to the ruling family was a clear victory for removing Murdoch sons James and Lachlan from the board of directors. But nothing has changed as the Murdoch family has created a structure which gives it over 38% of the votes in the company despite owning just 12% of the shares by value.
The row opens up a debate – should family firms be favoured or shunned by investors?
The details of the protest vote at News Corp filed with the SEC show a clear majority for the Murdoch board incumbents. But remove the family block vote which allows it to punch substantially above its weight and the 7% owned by close ally Prince Alwaleed bin Talal, and it is clear that the independent shareholders voted massively against the Murdoch sons' boardroom positions.
Figures in the Guardian show a clear majority of other shareholders voting against Lachlan and James Murdoch.
That pressure plus a more volatile share price could eventually force at least one son to resign.
The world of business is littered with some amazing family rows. They're what happens when money proves thicker than blood ties. Who would have thought sports goods rivals Puma and Adidas were from the same family. There's a fascinating slide show of some of the most famous family feuds – add to that last week's L'Oreal bust-up which saw a mother and daughter go head to head. And if the Murdochs think they are the only family media empire with problems, take a look at the row at The Hindu, one of India's pre-eminent English language newspapers.
But what are the pros and cons of family succession? It generally only matters if there are outside shareholders to consider or if there are "creative" issues – a number of rows centre on fashion and related businesses. Here's five points in favour – and five against. Mindful Money readers can add their own on the comment form!
So keep it in the family? Or open up firms to outsiders?
More from Mindful Money:
To receive our free email newsletter sign up here.