Monday, July 18, 2011

What is James Murdoch doing on the GlaxoSmithKline board?

Nevermind whether James Murdoch should remain chairman of British Sky Broadcasting, how long before someone asks why he is on the board of GlaxoSmithKlein Plc (LON:GSK)?

Unnoticed amid all the headlines about Rupert Murdoch’s media empire is that his favourite son is a non-executive director of Britain’s biggest pharmaceutical company.
And if television is a business regulated by governments, so much more so are drug companies – not just in Britain, but globally. Including America. Pharm companies cannot afford to court controversy in their governance.
James Murdoch has been a Glaxo main-board director since May 2009. Yes, FTSE 100 companies tend to recruit their non-execs from the execs of other Footsie firms and James was chief executive of BSkyB before he became chairman. But shareholders might belatedly start asking what experience he brings: his whole working life has been inside his father’s empire.
The Murdoch son is a director of the Sotheby’s auction house too – and his day job is chief operating officer of the News Corporation parent. But it is his chairmanship of News International, the News Corp subsidiary that published the News of the World, that makes him controversial. He authorised the secret payments of up to £1m to the likes of publicist Max Clifford and former footballer Gordon Taylor in the hope of curtailing the phone-hacking scandal – payments he now admits were a mistake.
And after the resignation of Rebekah Brooks – and her arrest – James is now first in the firing line for questions about how that scandal was handled, both at the subsidiary level and at the parent when its share price started to slide.
MPs on the House of Commons culture committee will be quizzing James directly. But BSkyB’s independent directors are also reportedly asking whether he should remain their chairman – a role that was difficult when News Corp was bidding for Sky but which has become harder since.
True, James was re-elected to the Glaxo board in May with 97 per cert of the votes cast, but much has emerged about News Corp and its subsidiaries since. Shouldn’t investors now be asking what value his presence brings to Glaxo’s boardroom?

1 comment:

Pharma Giles said...

Jack: Surely this is old news ?