Reacting to the news that James Murdoch is standing down as BSkyB chair, Alan MacDougall, managing director of PIRC, said:
This decision was inevitable. The combination of parliamentary and regulatory scrutiny and pressure from shareholders meant it was only a matter of time before some ground was given. But we believe it would be best for the company and its shareholders if he left the board entirely, and would find it hard to support his re-election at a future meeting.
We are pleased that there has been a belated acknowledgement of the need for change, but dragging the process out was the wrong approach to take. In reality the company should have appointed an independent chair last summer, to create a clear separation between the management of the business and the scandal at News Corp. Failure to act more quickly has resulted in self-inflicted reputational damage.
Sky still isn’t out of the woods, not least because of the Ofcom ‘fit and proper’ test. Therefore shareholders will be looking to see substantial governance reforms, and will be watching new board appointments with interest.
According to Murdoch:
As attention continues to be paid to past events at News International, I am determined that the interests of BSkyB should not be undermined by matters outside the scope of this company. I am aware that my role as chairman could become a lightning rod for BSkyB and I believe that my resignation will help to ensure that there is no false conflation with events at a separate organization.
Murdoch, who served as chairman of News International until stepping down in February, has consistently denied any knowledge of widespread phone hacking at the papers then under his command. He will be replaced by Nicholas Ferguson, currently the company’s deputy chairman. (James Murdoch resigns as BSkyB chairman, LATimes, 4/3/2012) That seems about as unlikely as Nixon not being involve in Watergate.