News Corp.'s Board Faces Heightened Scrutiny

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The News Corp. board of directors met in Los Angeles Tuesday. It was the first time members had gotten together since the phone-hacking scandal that has roiled its British holdings.

STEVE INSKEEP, Host:

Even as the Fed was meeting yesterday, there was a meeting of the board of Rupert Murdoch's News Corp. They met in Los Angeles amid the voicemail hacking and corruption scandal.

NPR's David Folkenflik reports on the heightened scrutiny on that board.

DAVID FOLKENFLIK: Despite the shuttering of the profitable News of the World tabloid, despite the arrests, and despite investigations spreading in two countries, the board late last month said it backed the leadership of Chairman and CEO Rupert Murdoch and his team. No word yet from yesterday's annual meeting.

Both of Murdoch's sons also sit on the media empire's board. His daughter Elisabeth was primed to join too, until the scandal hit. News Corp surprised analysts when it acquired her independent film company for roughly $675 million. Three former News Corp executives and the godfather to one of Murdoch's grandsons are also directors.

Nell Minow is a leading Murdoch critic who is affiliated with the corporate governance analysis firm GMI.

NELL MINOW: We have consistently given Mr. Murdoch's board an F since they first incorporated in the U.S., and that's only because there's no lower grade.

FOLKENFLIK: Minow argues Murdoch treats the publicly traded company like a family firm, and that the board is helping him to do so.

MINOW: This is a big, big mess. And Rupert Murdoch went to testify before parliament and he said at the same time I didn't know this was going on and I'm the guy to fix it. Those are two incompatible statements and anybody who is swayed by that is not paying attention.

FOLKENFLIK: Yet many investors say they support Murdoch, praising his record. He's set to answer questions on a conference call with investors later today.

David Folkenflik, NPR News.

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