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New Disclosure Policy at News Corp a Win For Shareholders

As dozens of publicly traded companies consider shareholder resolutions to increase corporate accountability around political spending, one, in particular, is helping to lead the way. News Corporation, the media company owned by Rupert Murdoch whose holdings including Fox Broadcasting Company, recently announced that it will voluntarily disclose its political contributions on its website once a year. Additionally, all corporate political contributions must be pre-approved by News Corp’s Executive Vice President for Government Affairs. Though News Corp’s new policy is not perfect, it is an encouraging step forward for concerned citizens who want their voices heard.

Eyebrows were raised following News Corp's controversial $1 million donations to the Chamber of Commerce and, in particular, the Republican Governors' Association (RGA) during the 2010 campaign. At the time, Murdoch stated that the News Corp contribution to RGA was a result of his "friendship with [Ohio gubernatorial candidate] John Kasich" and "had nothing to do with Fox News," despite Kasich's nine years working at the network as well as ongoing appearances on Fox programs after he declared his candidacy. Murdoch additionally commented that News Corp "didn't expect" the Chamber donation to become public, begging the question of whether the company had made other political contributions in secret.

In an October 2010 letter to News Corp's board, the Nathan Cummings Foundation, a private foundation that owns 3,820 shares of News Corp stock worth $52,000, wrote, "The apparent lack of a strategic rationale for News Corp raises some very serious concerns for shareholders as to whether Mr. Murdoch and the rest of the News Corp Board of Directors are truly taking shareholder interests into account when they approve political payments made with shareholders' assets." Without full disclosure, the letter reads, "there are clear reputational risks involved in political expenditures – particularly for a news media company – and unnecessary potential for abuse of corporate treasury funds to further the personal political agendas of corporate management."

It was in response to shareholder pressure at News Corp's annual meeting last fall that this new disclosure policy was adopted. The policy will apply to contributions made directly from News Corp's general treasury, a type of spending that was only recently made legal by the Citizens United Supreme Court decision in 2010. News Corp has a separate political action committee, News America-FOXPAC, which is funded by "voluntary contributions from eligible employees of the company" and is required to publicly disclosure its contributions to the Federal Election Commission.

Proposals to increase corporate accountability of political spending are also being considered by Citigroup, I.B.M., Charles Schwab, Prudential, JPMorgan Chase and other corporations in proxy meetings this spring.

Full Resources from this Article

New Disclosure Policy at News Corp a Win For Shareholders

Center for Political Accountability
Media Matters for America – News Corp. Will Disclosure Corporate Political Contributions
Politico – Kasich inspired News Corp.’s RGA gift
New York Times – News Corp. Shareholder Objects to G.O.P Donations
New York Times – The Supreme Court Had Its Say, Now Let Shareholders Decide

This article is part of PSN's email newsletter, The Stateside Dispatch.
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