Could Murdoch’s Handpicked Board Turn Against Him?

A look at the directors of News Corp., including some possible rebels

Rupert Murdoch could be facing a coup. If a recent report from Bloomberg is correct, at least some of the independent directors of News Corp. have, due to the phone hacking scandal that is engulfing the company and taking down some of its senior-most executives, begun asking "whether a leadership change is needed."

Fortunately for Murdoch, he's built himself something of a firewall. Of the 16 voting members currently on the board, three are Murdoch family members—there’s Rupert himself, of course, along with his sons James and Lachlan—and another four are current News Corp. executives. (Elisabeth Murdoch, whose Shine Group was just purchased by News Corp., is expected to join the board as a voting member at some point, though the current scandal may delay that move a bit.)

But even those seven presumably reliable votes don’t get Rupert Murdoch an automatic majority. So he’s stacked the rest of the board with loyalists and puppets. Many have ties with Murdoch that stretch back decades—and involve mutually beneficial financial transactions.

"It's an open secret, a joke inside News Corp., that the board is designed to be obsequious to Rupert," a source close to the company says.

As directors of a multinational media conglomerate, these people should have legitimately independent voices, be leaders in their fields. Until he retired from it in January, the Washington Post Company, for example, had Warren Buffett on its board. News Corp. has a 31-year-old aspiring opera singer.

That said, there are a few people on the board who, if they have a mind to, could pose a real threat to the Murdoch family and its control of News Corp. Here's a look at the board members who aren't Murdochs or current News Corp. executives:

Viet Dinh: It's no surprise that, according to Bloomberg, Dinh is one of two directors leading the anti-Murdoch forces. A former government employee now in academia, Dinh—who serves as chairman of the board's corporate governance committee—isn't likely to have the kind of bank account that can easily absorb a lawsuit that involves personal liability on the part of the board members. Plus, having served as an assistant attorney general during the George W. Bush administration, Dinh, 43, is no stranger to privacy issues surrounding phone calls—he was the primary author of the Patriot Act. Currently a law professor at Georgetown University, where he steers the Asian Law and Policy Studies Program, Dinh got his law degree from Harvard and served as a clerk to former U.S. Supreme Court Justice Sandra Day O’Connor.

Thomas Perkins: Perhaps the most independent of the “independent” directors, Perkins is reportedly the other leader of the move against Murdoch. And, if he is, he has reason to be working with Dinh. When Perkins resigned from Hewlett-Packard’s board in 2006 over a separate phone hacking scandal, Dinh was his lawyer.

Perkins has more substantive business experience than some of his fellow directors: In 1972, he founded the venture capital firm Kleiner Perkins Caufield & Byers. An early Silicon Valley investor, the firm reached a deal with Google in 1999—buying 20 percent for $25 million. Perkins, 79, joined the News Corp. board in 1996.

Formerly married to romance novelist Danielle Steel, Perkins is well acquainted with scandal—in 1996, he was convicted of involuntary manslaughter after a lethal collision involving a yacht he was racing.

Kenneth Cowley: A native Australian, Cowley is an old Murdoch cohort. He spent 16 years—until 1997—serving as News Corp.’s director of Australian operations. Trouble struck in 1996 when Cowley fell out of Murdoch’s good graces following an election in Australia in which incumbent Prime Minister Paul Keating was defeated, thanks in part to Murdoch’s publications. Keating has said that Murdoch called him the day after the vote to apologize, saying, “[W]e got it wrong: correction—Ken got it wrong.” A year later, Cowley was out of his position at News Corp., replaced by Murdoch’s son Lachlan. Still, he’s been sitting on Murdoch’s board for over three decades—it's something of an honorary position, given by Murdoch to a discarded executive.

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