Church of England sells £1.9m News Corp shareholding
Published Aug 7 2012, 13:14 BST | By Andrew Laughlin
The Church of England has sold its almost-£2m shareholding in News Corporation after judging that Rupert Murdoch's firm has not brought about "sufficient change" since the phone hacking affair.
Whilst the amount of shares sold will not overly concern the $60 billion News Corp business, the identity and profile of the seller may worry its chairman and chief executive Murdoch.
In a statement today (August 7)
, the Church Commissioners and the Church of England Pensions Board said that they offloaded the shareholding - worth £1.9m - on the advice of the Church's Ethical Investment Advisory Group (EIAG).
The EIAG had warned the religious body that News Corp had not shown "a commitment to implement necessary corporate governance reform" across the business.
As a result, none of the three national investing bodies of the Church of England now holds shares in News Corp. The announcement comes just a day before News Corp unveils its results for the second quarter of 2012.
The Church said that it first raised concerns with Murdoch and the News Corp board after the phone hacking scandal at UK newspaper the News of the World
really broke in July 2011.
The controversy resulted in the closure of the more-than-160-year-old Sunday paper after a string of shocking revelations, and also prompted a judge-led inquiry into UK media standards and ethics.
The Church said that, after a year of dialogue between News Corp and the EIAG, it "was not satisfied that News Corporation had shown, or is likely in the immediate future to show, a commitment to implement necessary corporate governance reform".
Andrew Brown, secretary of the Church Commissioners, said that the hacking scandal had "raised some serious concerns" amongst the Church's investing bodies about the shareholding in News Corporation.
"Our decision to disinvest was not one taken lightly and follows a year of continuous dialogue with the company, during which the EIAG put forward a number of recommendations around how corporate governance structures at News Corporation could be improved," he stated.
"However the EIAG does not feel that the company has brought about sufficient change and we have accepted its advice to disinvest."
The Church established the EIAG in 1994 to advise the religious body over ethical investment policy.
Between April 2011 and March 2012, the EIAG held meetings with 40 companies "prioritised for engagement", one of which was News Corporation.
Despite News Corp recently announcing plans to split into two companies
and Murdoch's decision to resign as director of beleaguered publisher News International
, the EIAG was unconvinced by the appetite for reform at the firm.
Alongside banning investment in companies involved in military products and services, pornography, alcoholic drinks, gambling, tobacco, human embryonic cloning and high interest rates lending, the Church is also now vigilant on issues of poor corporate governance in its investment targets.
Despite the News Corp shareholding being relatively small, the Church of England is a major investment player.
It has three national investment bodies - the Church Commissioners for England, the Church of England Pensions Board and the CBF Church of England Funds - and together they hold a broad range of assets worth in excess of £8 billion.