BSkyB is bracing itself for a torrent of shareholder unrest following the appointment of James Murdoch, son of group chairman Rupert Murdoch, as its new chief executive.
According to Sky, James Murdoch was appointed following the unanimous recommendation of a four-member nomination committee of non-executive board members. As a result the board had the simple choice of approving the only recommended candidate.
Commenting on the decision the nomination committee said: “After a rigorous search and nomination process, we are pleased, having considered a wide group of excellent candidates, to have found in James Murdoch a candidate in whom we are unanimously confident can lead Sky forward to greater success.”
Rupert Murdoch, chairman of BSkyB, added: “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.”
However, it is understood senior investors are less convinced over the selection process and are expected to call an extraordinary meeting to force as many as six senior executives to depart.
In an attempt to quash concerns over the percieved influence of the father and son team, BSkyB has named veteran banker Lord Rothschild as deputy chairman. However, it is unlikely this concession will stifle criticism over the controversial appointment (see Murdoch Faces Pressure From TUC Over Son’s Appointment).
Brendan Barber, general secretary of the Trade Union Congress, said: “The chances of the hereditary principle producing the best candidate are several billion to one. There is now a serious question about whether BSkyB is a public limited company, owned by its shareholders, or a dynasty. This whole sorry affair shows just how easy it is for companies to thumb their noses at good standards of corporate governance.”
The appointment will make James, at 30, the youngest ever chief executive of a FTSE 100 company. He previously headed up Star TV, Murdoch’s pay-TV station in China.
