Bloomberg reported this week that News Corp.'s board had discussed whether to replace the company's scandal-plagued leader, Rupert Murdoch, with COO Chase Carey. So far, News Corp. is insisting that Murdoch, who denied responsibility for the News of the World phone-hacking mess in testimony to British Parliament on Tuesday, is staying put. No matter what happens, Murdoch will largely remain in control, because he owns 40 percent of the company's voting stock. But would it be better for the company and its shareholders if he stepped aside as the media empire's figurehead?
Yes. Murdoch's resignation is the only way to restore accountability: "Clearly, the company needs to clean house," says Eleanor Bloxham at Fortune. That means updating the board of directors, because it failed to "look into serious allegations" it knew about for years. But it also means Murdoch should give up either his CEO spot or his position as chairman of the board. That's not just a way to soothe shareholders — it's just good corporate governance to make sure the company isn't a one-man show.
"What's in store for Rupert Murdoch?"
No. The company trusts Murdoch's leadership: Murdoch did nothing wrong, says Thomas Perkins, one of News Corp.'s independent directors, as quoted by Britain's Guardian. He was misled "by very bad people at a very low level in the organization," just as the board of directors itself was. The board has faith in Murdoch's leadership, and this scandal doesn't change that.
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News Corp. should dump its newspapers before Murdoch: "Murdoch's Achilles' heel has always been his unabashed love of newspapers," says Joe Flint at the Los Angeles Times. Investors hate everything about newspapers, and they're a drag on News Corp.'s stock price. Now that the phone-hacking scandal has forced Murdoch to close News of the World, the best way to get a fresh start is "to stop the presses that threaten the family empire."
"Phone-hacking scandal could force Murdoch to let go of newspapers"
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