ISS Supports News Corp's Plan to Abolish Dual-Class Share Structure

Leading proxy advisory firm Institutional Shareholder Services (ISS) has recommended that News Corp (NASDAQ:NWSA) shareholders vote in favor of a restructuring plan aimed at ending the company's dual-class voting structure. This move aligns with the goals of activist investment firm Starboard Value, which proposed this change earlier this year to remove Rupert Murdoch's control over the media conglomerate.

The proposal set to be voted on at the News Corp meeting on November 20 aims to equalize voting power by assigning one vote per share. Currently, despite owning 14% of the economic interest in News Corp, Murdoch and his family hold 41% of the voting rights due to the dual-class share system.

ISS supports the initiative, stating that shareholders would benefit from a capital structure where voting power aligns with economic ownership and exposure to risk. This recommendation could indicate a shift in shareholders' trend towards better corporate governance and equal voting rights.

Despite this pressure for change, News Corp advised its investors to reject Starboard's proposal. It is important to note that the proposal is not binding; thus, even if it gains majority support from shareholders, the News Corp board is not obligated to implement the changes.

The topic of dual-class share structures has been a point of contention in governance circles. While many shareholders at News Corp have historically supported the elimination of this system, no steps have been taken thus far.