James Murdoch is to step down as chairman of BSkyB.



The younger son of Rupert Murdoch has faced increasing pressure in the UK over what he knew about alleged phone hacking at former News of the World publisher News International.

James was a non-executive chairman of the pay-TV giant BSkyB, of which News Corporation owns a 39.1% stake.

The Guardian has confirmed that Murdoch is to step down from his role as chairman of BSkyB after a board meeting later on Tuesday. Sky News City reporter Mark Kleinman broke the news shortly before 1pm.

The Guardian's media commentator Roy Greenslade has given his reaction to the news of Murdoch's resignation in an interview with Sky News.

He says it was somewhat "inevitable" and adds: "I don't think it's a massive surprise even though the timing may be surprising. It comes ahead of giving evidence to Leveson and more significantly of the media select committee phone hacking report."

Greenslade adds that this raises questions over Murdoch's position on the News Corp board.

Here is a quick timeline of the recent developments in James Murdoch's role in the UK:

• Today: Revealed that Murdoch is to step down as chairman of BSkyB.

• 17 March: Murdoch resigns his directorship at auction house Sotheby's.

• 14 March: Murdoch writes to MPs on Commons media select committee expressing "deep regret" over News of the World phone hacking.

• 29 February: Murdoch resigns as chairman of News International, publisher of the Sun and formerly News of the World.

• 27 January: Murdoch quits GlaxoSmithKline board.

John Prescott has just tweeted:

"@afneil: Sky News reporting James Murdoch to step down from BSkyB chairmanship." < It's The Son Wot Lost It! #gotcha — John Prescott (@johnprescott) April 3, 2012

James Murdoch's resignation comes at a crucial time for the heir apparent's media legacy in the UK.

It comes days ahead of a key report on phone hacking from the Commons culture, media and sport select committee, which twice questioned the younger Murdoch about what he knew about alleged impropriety at News International.

Murdoch is also feeling the heat from the media regulator Ofcom, which recently announced it was stepping up its investigation into whether he is a "fit and proper" person to sit on the board of BSkyB.

Murdoch will reportedly remain on the board of BSkyB, although he has stepped down as executive chairman.

Jack Irvine, the former News International executive, has described Murdoch's resignation at BSkyB chairman as a "tragedy" but that it was inevitable.

In an interview with Sky News, Irvine said: "It's a very wise move … it should maybe have happened a bit sooner and the appointment made is a superb one."

Irvine said that TV executives have to be "seen as cleaner than clean", and adds: "It's the right thing to do. There's no choice to do it."

He praised Murdoch's work as chairman of BSkyB and said it is a "tragedy" that his tenure has ended like this. He does not see the point of Murdoch remaining on the board of BSkyB.

Irvine says that Rupert Murdoch "trusted people in London that he shouldn't have trusted" and "the ship lost direction", referring to News International.

BSkyB board members were only called to attend an unscheduled board meeting earlier today, reports Sky News City editor Mark Kleinman, who broke the news of Murdoch's resignation.

He believes that the City will welcome Murdoch's resignation and that will be reflected in a boost to BSkyB's share price.

Andrew Neil, former editor of the Sunday Times, has tweeted:

Had already stepped down from Big Pharma and Sotheby boards. As well as News Group. BSkyB resignation on cards. Hacking had done him damage — Andrew Neil(@afneil) April 3, 2012

The Guardian's head of media, Dan Sabbagh, has written this report on Murdoch's resignation:

James Murdoch will step down as chairman of BSkyB shortly, after the man who had been thought of as Rupert Murdoch's corporate heir concluded it was no longer worth hanging on and risking a critical verdict from MPs inquiring into phone hacking. The 39-year-old, who has been chief executive and then chairman since 2003, is understood to have made up his mind to resign the post, although BSkyB has not yet made a formal announcement to the stock exchange. By stepping down, it will mean that no Murdoch occupies a top position at the satellite broadcaster for the first time in years.

You can read the full story here.

Here's a bit of information about Nick Ferguson, the deputy chairman of BSkyB, who has been tipped up to take over at the top of the broadcaster. "He eats nails for breakfast," a source told the Guardian.

At one point, Ferguson queried why he – who made his money in private equity – paid less tax (proportionately) than the cleaners.

You can read more on this here.

Our colleague on the business desk, Rupert Neate, has this background on recent BSkyB shareholder feelings on the now-departed chairman:

In November 44% of BSkyB's independent shareholders voted against or abstained from voting for James Murdoch's re-election to the board. Big institutional shareholders that voted against his reappointment included Legal and General Investment Management, the broadcaster's third biggest shareholder, Standard Life and JP Morgan. News Corp controls 37% of voting shares in Sky so Murdoch easily achieved enough votes to continue his chairmanship. At the meeting Guy Jubb, head of governance at Standard Life Investments, took the unusual of standing up to tell the audience why he had voted against Murdoch. "We pointed out [to the board] that our misgivings had been heightened by the revelations of stewardship shortcomings at the News of the World, a title for which Mr Murdoch bore a measure of responsibility." Jubb added that Standard Life was "deeply disappointed" that not a single director shared their concerns. News of Murdoch's exit has had little effect on BSkyB's shares down just 0.22% to 679.5p, valuing the company at £11.6bn.

The Guardian's Lisa O'Carroll has just tweeted that Labour MP Tom Watson, who has led the campaign in Parliament over phone hacking, has applied to be a "core participant" in the third module of the Leveson inquiry, which would give her full access to all witness statements and related documents:

#leveson labour mpTom Watson seeking core participant status. Evan Harris former MP also seeking CP status — lisa o'carroll (@lisaocarroll) April 3, 2012

It remains to be seen what BSkyB investors make of James Murdoch's resignation as executive chairman of the pay-TV company, but interested parties are lining up to have their say.

Louise Rouse, director of engagement at FairPensions, a charity that promotes responsible investment by fund managers, says Murdoch's reported resignation was "inevitable". She added:

Any suggestion that Mr Murdoch will remain as a director of BSkyB will likely be challenged by investors. While people should have the opportunity to learn from their failings, it is a big ask of shareholders for him to expect that a FTSE 100 boardroom is the appropriate classroom.

BSkyB has just issued a statement confirming that James Murdoch is stepping down.

Nick Ferguson is to become chairman, and Tom Mockridge, who runs News International, is becoming the deputy chairman. He is now the ranking News Corp local exec on the board.

Here is the full text of the statement:

The board of British Sky Broadcasting Group plc ('BSkyB' or 'the Company') today announced that James Murdoch has stepped down as chairman and will continue to serve in his capacity as a non-executive director of the company. Mr Murdoch is succeeded as chairman of BSkyB by Nicholas Ferguson, who was appointed as a director of the company in June 2004 and previously served as deputy chairman and senior independent non-executive director. Tom Mockridge, who joined the board in February 2009, has been appointed as deputy chairman. Andrew Higginson, who has been a director of BSkyB since September 2004, succeeds Nicholas Ferguson as senior independent non-executive director. In a letter to the board setting out the reasons for his resignation, Mr Murdoch said: "I have been privileged to serve first as chief executive and then as chairman of this outstanding company and I am proud of what we have achieved over this period." Mr Murdoch continued: "As attention continues to be paid to past events at News International, I am determined that the interests of BSkyB should not be undermined by matters outside the scope of this company." He added: "I am aware that my role as chairman could become a lightning rod for BSkyB and I believe that my resignation will help to ensure that there is no false conflation with events at a separate organisation." Mr Ferguson commented: "On behalf of the entire board, I would like to thank James Murdoch for the outstanding contribution he has made both as CEO and chairman of BSkyB. With his vision, drive and strategic insight, the company has performed exceptionally and continues to transform itself to take advantage of a broader growth opportunity in home entertainment and communications. "The board's support for James and belief in his integrity remain strong. We understand his decision to step aside at this time and we both welcome and look forward to his continued contribution as a non-executive director. The entire Board and management remain fully focused on maintaining BSkyB's strong progress, delivering an outstanding service for customers and creating value for all shareholders."

News Corp has just issued a joint statement from Rupert Murdoch and Chase Carey. That it's a joint statement is very surprising. And the language is hardly warm. It just says "we are grateful" for James Murdoch's work.

Here is the full text:

Statement from Rupert Murdoch, chairman and CEO Of News Corporation and Chase Carey, president and chief operating officer, News Corporation regarding James Murdoch's decision to step down as chairman of BSkyB NEW YORK, NY – April 3, 2012 - "We are grateful for James Murdoch's successful leadership of BSkyB. He has played a major role in propelling the company into the market-leading position it enjoys today – and in the process has been instrumental in creating substantial value for News Corporation shareholders. We look forward to BSkyB's continued growth under the leadership of Nicholas Ferguson and Jeremy Darroch and to James' continued substantial contributions at News Corporation."

We have spoken to Chris Bryant, the Labour MP and alleged phone-hacking victim who has been critical of News International and the Murdochs.

He said: "[The resignation] is inevitable and he should have gone a long time ago. James Murdoch's only defence against allegations of involvement in a cover-up at News International was that he was so incompetent he couldn't be bothered to read his emails."

Bryant added: "We have seen a phenomenal turnaround in the fortunes of the Murdoch family but we should never allow one person to have such a stranglehold over the British media ever again."

Professor Ajay Bhalla, an expert in family-owned businesses at Cass Business School, said James Murdoch's resignation marks a shift towards the family taking a back seat in managing News Corporation.

James Murdoch's resignation as chairman of BSkyB should come as no surprise. At this point, James Murdoch has first and foremost an obligation to preserve the Murdoch family's wealth and reputation. Family objectives for wealth, status and power for present and future generations play a vital role in family-owned firms. However, this varies depending on the type of family firm. There are two types of family firms which are publicly owned. One where the family not only has the controlling stake but is also deeply involved in managing the business. The other is where the family may or may not have the controlling stake but is not involved in the business. So far the Murdochs have opted to be in the first category. What we are seeing now is a shift towards the Murdoch family taking a back seat in managing the businesses, and becoming the second type of family firm. In the current situation, the family has to maximize its wealth which has been tied in the businesses it controls. In the near future, we are likely to see the family opting for private rather public ownership - all in the name of family and the next generation.

The Guardian's Lisa O'Carroll has just tweeted that former News International chief executive Rebekah Brooks is seeking "core participant" status at the Leveson inquiry, which would give her full access to all witness statements and related documents:

#leveson Rebekah Brooks applying for core participant status to enable her to get advance notice of the evidence given by other witnesses — lisa o'carroll (@lisaocarroll) April 3, 2012

The shareholder activists who led the revolt against the Murdoch clan at last year's annual general meeting are calling for Rupert Murdoch to step down as chairman and for James to quit, reports the Guardian's Dominic Rushe.

Christian Brothers Investment Services (CBIS) rallied a massive vote against Murdoch, his sons and several of his appointed directors last year. James was the least popular director. After subtracting the shares controlled by the family, 67% of the vote went against James Murdoch. This year's resolution, filed shortly before James Murdoch stepped down at BSkyB, calls for Rupert Murdoch to step down as chairman and an independent director to be appointed in his place. "This pervasive and continuing scandal has led to an erosion of public confidence, helped to scuttle a critical business acquisition, and threatened the journalistic reputation and viability of News Corporation's UK publications. It also has made clear the need for independent board leadership to steer the company through a process of reform," says the resolution.

The Guardian's Lisa O'Carroll, who is at the directions hearing about the third module of the Leveson inquiry, has just tweeted:

#leveson module 3 will start after local elections on may 3 and continue up to end of June — lisa o'carroll (@lisaocarroll) April 3, 2012

Following the call for Rupert Murdoch to step down as chairman of News Corp in the US (see update at 3.06pm), a separate investor group has called for James Murdoch to step down from the BSkyB board entirely.

Our colleague on the business desk, Rupert Neate, has this report:

Pensions & Investment Research Consultants (Pirc), the investor activist group that advised shareholders to vote against James Murdoch's reappointment last year, said it would be "best for the company and its shareholders if he left the board entirely". Alan MacDougall, Pirc's managing director, said: "This decision was inevitable. The combination of parliamentary and regulatory scrutiny and pressure from shareholders meant it was only a matter of time before some ground was given. But we believe it would be best for the company and its shareholders if he left the board entirely, and would find it hard to support his re-election at a future meeting." "We are pleased that there has been a belated acknowledgement of the need for change, but dragging the process out was the wrong approach to take. In reality the company should have appointed an independent chair last summer, to create a clear separation between the management of the business and the scandal at News Corp. Failure to act more quickly has resulted in self-inflicted reputational damage." "Sky still isn't out of the woods, not least because of the Ofcom 'fit and proper' test. Therefore shareholders will be looking to see substantial governance reforms, and will be watching new board appointments with interest."

The Guardian's Lisa O'Carroll has just tweeted more about the lineup for the next stage of the Leveson inquiry:

#leveson newspaper proprietors to give evidence in week April 23 and in week May 8. (Expect Murdoch, lebedev, barclays, rothermere) — lisa o'carroll (@lisaocarroll) April 3, 2012

Here's more reaction from the Guardian's Rupert Neate:

Sarah Wilson, chief executive of corporate governance consultancy Manifest, said James Murdoch's resignation as chairman would put an end to the Murdoch family's day-to-day control of the pay-TV broadcaster. Wilson, who has long campaigned against corporate governance failures at BSkyB, said it would be "fatal" if News Corporation proposed another Murdoch family member to a senior position. She said BSkyB investors had become "very angry" at the effect the phone hacking scandal was having on BSkyB's reputation. "Most of the independent shareholders will be happy with the news," she told the Guardian. "Shareholders don't like uncertainty – it is the right thing to do. It's better that he goes rather than be removed at a shareholder meeting." Wilson said that although News Corp has enough votes to ensure Murdoch could have kept his chairmanship position, they would have had no choice but to remove him "if all the independent shareholders had voted against [him]". Ajay Bhalla, an expert in family-owned businesses at Cass Business School, said James Murdoch's resignation "should come as no surprise" because his "first and foremost an obligation to preserve the Murdoch family's wealth and reputation". "Family objectives for wealth, status and power for present and future generations play a vital role in family-owned firms. However, this varies depending on the type of family firm. There are two types of family firms which are publicly owned. One where the family not only has the controlling stake but is also deeply involved in managing the business. The other is where the family may or may not have the controlling stake but is not involved in the business. "So far the Murdochs have opted to be in the first category. What we are seeing now is a shift towards the Murdoch family taking a back seat in managing the businesses, and becoming the second type of family firm. In the current situation, the family has to maximise its wealth which has been tied in the businesses it controls. In the near future, we are likely to see the family opting for private rather public ownership – all in the name of family and the next generation."

Ed Miliband has said that Murdoch was right to step down as chairman of BSkyB.

Speaking during a visit to Toyota in Burnaston, Derbyshire, Miliband said:

I think it probably is the right thing for him to do but it goes beyond one person. He's taken the decision that he has, but what now needs to happen is that the police investigation takes its course and gets to the bottom of exactly what happened. The most important thing is that the organisation has a top-to-bottom clean-up and understands what happened and gets rid of those people who did wrong.

It is the crucial Commons report the media is waiting for. But the chairman of the Commons media select committee, John Whittingdale, is refusing to be drawn on what its report will say about alleged impropriety at News International.

Whittingdale just told the BBC News channel that his committee has "not yet determined our conclusions". He added that James Murdoch's resignation could not have been an attempt to pre-empt the report because the committee has not formulated its conclusions.

"Part of the problem has been that new evidence continued to emerge pretty regularly … These are very significant and important matters and we have to be clear that we have reached the right conclusions," Whittingdale said.

"Obviously we are looking at the period when James Murdoch was in charge and we will comment on the evidence he gave, but I can't preempt that report."

Whittingdale earlier told Sky News: "I was not wholly surprised, rather I had expected actually that he would have stepped down at the time it was announced he was returning to New York and it is perhaps surprising that it has taken this long."

The BBC's Have I Got News For You Twitter account has just tweeted:

James Murdoch's BSkyB resignation sparked cheers in the corridors of the BBC, until staff remembered the DG position is open. — HaveIGotNewsForYou(@bbcHIGNFY) April 3, 2012

The Guardian's Dominic Rushe has just filed this:

In a statement following Murdoch's resignation, Julie Tanner, assistant director of socially responsible investing at Christian Brothers Investment Services (CBIS), said, "The resignation of James Murdoch as executive chairman of News International is a welcome small first step in the right direction toward improving the corporate culture at News Corporation, the parent company of News International." "As News Corp shareholders, we remain troubled by what we see as the company's failure to move quickly and decisively to address and correct the ethical lapses that continue to come to light at News Corp," Tanner continued. "This continues to damage the company's reputation, threaten the value of all shareholders' investments in the company, and diminish their confidence in management and the board." "Yet News Corp still has not implemented substantive corporate governance reforms or management practices, such as establishing robust press standards and a substantive code of ethics."

Tom Mockridge, the News International chief executive who was today appointed deputy chairman of BSkyB, has issued the following statement:

I regard it as an honour to be elected as deputy chairman of BSkyB although it is disappointing this event is triggered by the change of role of James Murdoch. Sky today is the UK's largest media company and a world-class performer. This achievement has been possible only because of two decades of ongoing commitment, passion and entrepreneurial risk-taking by News Corporation, its founder Rupert Murdoch and, for the past near decade, James. Even today I continue to have the privilege of working with individuals at News Corp who began with Sky in 1987 when it was literally a single channel of nothing produced from a prefab building. James has ensured the challenger spirit that made this possible is ingrained in the company's DNA and I am confident Sky's employees along with Nick, Jeremy and the entire board will continue to strongly develop the business in the interests of all shareholders.

More from Ed Miliband, who is visiting to a Toyota factory in Derbyshire.

The Labour leader has said that the allegations surrounding Murdoch-owned companies in the UK "goes beyond one person".

He called for a "clear-out of those people that did wrong", adding: "It goes beyond one person. What now needs to happen is that the police investigation takes its course and we get to the bottom of what actually happened."

James Murdoch told Nick Ferguson a couple of weeks ago that he was considering standing down as chairman of BSkyB, according to the BBC business editor Robert Peston.

Peston reports that Murdoch told a meeting of BSkyB's non-executives and chief executive Jeremy Darroch that he was "minded to quit" and received their approval.

You can read Peston's full blogpost here.

While MPs and media commentators pore over James Murdoch's more recent history, the website Out.com has resurfaced some of the young executive's earlier work: cartoons penned by Murdoch in the late 90s. They repay careful observation (partly because we can't work out what they actually are) but the main character is dubbed "Albrecht the Hun". Answers on a postcard...

Our US media commentator and keen Murdoch-watcher Michael Wolff has been talking to Dominic Rushe.

"James has no job now. He's just taking up desk space, he has no portfolio and no authority," said Wolff.

Wolff, the author of Murdoch bio The Man Who Owns The News, said senior News Corp insiders were finding the whole situation "enormously amusing".

He said they blamed James for failing to tackle the hacking scandal at its source and allowing it to escalate into a major problem for a company whose newspapers represent a tiny fraction of its business.

Other than James the one person who was least enjoying the situation is Rupert, said Wolff. "I think he's trying to manage this for appearances sake, he would rather that James left of his own accord. It would be incredibly painful for Rupert to have to deliver that message."

Harriet Harman, the shadow culture secretary, has said that Murdoch's resignation should not be a distraction from the "fundamental problem of monopolistic ownership" of media companies in the UK.

In a statement, the Labour frontbencher said: "Changes at the top of BSkyB should not distract us from the fundamental, structural problems of media ownership.

"Murdoch owns too many newspapers. Never again must we allow any individual or organisation to acquire such a concentration of power when it comes to media ownership. "The problems revealed by the Leveson Inquiry are a result of the absence of a proper complaints system and too great a concentration of media power. It is this combination of impunity and invincibility which lies at the heart of the problem and must be addressed. "We await the forthcoming reports from Ofcom, the culture media and sport committee and the Leveson inquiry, but it is clear that there is a fundamental problem of monopolistic ownership."





The reaction from the City to James Murdoch's resignation as BSkyB chairman has been relatively calm.

BSkyB shares were down less than 1% at close of play on the London Stock Exchange, to 675.5p a share, valuing the pay-TV giant at £11.76bn.

James Murdoch might be slowly uprooting himself from the UK, but the younger son of Rupert will still be called to appear before the Leveson inquiry into press standards later this month.

Our media correspondent Lisa O'Carroll reports:

Rupert Murdoch and James Murdoch are expected to be summoned to the inquiry into press ethics within weeks after Lord Justice Leveson announced he would be calling in newspaper owners to give evidence between now and the middle of May. Lord Rothermere, owner of Daily Mail publisher Associated Newspapers, is also expected to be asked to testify under oath. So too is Eygeny Lebedev, the son of the Russian proprietor of the Evening Standard, Independent and the cut-price i. The media-shy Sir David and Sir Frederick Barclay, owners of the Daily Telegraph and Sunday Telegraph, could also be called, or their son Aidan who rarely makes public appearances.

Read the full story here.

Here is a summary of today's key developments:

• James Murdoch has stepped down as chairman of pay-TV company BSkyB. He remains on the company's board of directors.

• Nick Ferguson to take over as BSkyB chairman as Tom Mockridge, chief executive of News International, is appointed deputy chairman of the broadcaster.

• Shareholder activists renewed their call for Rupert Murdoch to quit as chairman of News Corporation.

• The Labour leader Ed Miliband calls for a "top-to-bottom clean-up" at News Corp.