More than 50% of Sky’s independent shareholders have voted against James Murdoch’s reappointment as chairman.

The head of the pan-European broadcaster had to rely on the support of Sky’s largest shareholder, 21st Century Fox, to win approval for his return to Sky after a four-year hiatus. Murdoch is chief executive of 21st Century Fox, the centre of his father Rupert Murdoch’s film, media and TV empire.

Sky said it noted the “significant vote” against the resolution and would engage with shareholders who opposed Murdoch’s appointment. It said the Sky board’s decision to reappoint James as chairman “was unanimous and recognised that he is a highly experienced executive with extensive knowledge of the international media industry and has been a strong contributor to Sky since he joined the board in 2003”.

It added that with Martin Gilbert as deputy chairman and Andrew Sukawaty as senior independent director “there are strong governance processes in place to protect the interests of independent shareholders”.

The broadcaster promised to “engage with those shareholders who voted against the resolution”.

Murdoch’s reappointment was approved by 71.55%, when Fox’s shareholding is taken into account. Excluding Fox’s stake, but including shareholders who made a positive decision to abstain from the vote, some 50.9% of shareholders failed to support Murdoch’s appointment. Fox owns a 39.14% stake in Sky.

Murdoch had been forced to stand down as chairman of Sky in 2012 after the phone hacking scandal at News International, publisher of the Sun, Times, Sunday Times and now defunct News of the World, where he had also been chairman.

However, he remained as a non-executive director at Sky, and was the only candidate put forward by its nominations committee to take over as chairman from Nick Ferguson.

Before the annual shareholders meeting in west London, Royal London Asset Management, which owns £52m of Sky shares, and a number of shareholder advisory firms urged a vote against Murdoch. They argued that the satellite broadcaster needed an independent chairman and criticised the process by which he was reappointed earlier this year.

Speaking to the Guardian at the AGM, Murdoch dismissed concerns about the conflict of interest of his role, admitting he was not an independent director. “I’m not an independent director, being associated with the major shareholder,” he said. “You saw there were no questions from shareholders here. So it’s not for me to comment.”



Catherine Howarth, chief executive of ShareAction, said the vote of independent shareholders against Murdoch as chairman was a significant moment that drew parallels with the recent corporate governance controversy at Sports Direct.

She said: “It’s a major embarrassment for the board of Sky that they couldn’t get a majority of independent shareholders to support their candidate for chair. This is a highly significant vote. James Murdoch will have to work very hard indeed to win back the confidence of shareholders. The Sports Direct debacle has demonstrated the financial risk of rotten corporate governance and of losing the confidence of your shareholders.”

Murdoch was appointed by a three-member committee of Sky directors, including new deputy chairman Martin Gilbert, the chief executive of Aberdeen Asset Management and Dave Lewis, the chief executive of Tesco, who stood down as a Sky non-executive director after the shareholder meeting.

Piers Hillier, the chief investment officer at Royal London, said: “No attempts were made to advertise the position externally, or appoint an agency, which goes against the UK corporate governance code.”

The Fox TV, film and entertainment business was spun out of News Corp as a separately listed company in 2013. News International, which was rebranded News UK in the same year, is part of News Corp, the newspaper company founded by Murdoch’s father, Rupert.

The Murdoch family was forced to give up on an £8bn-plus News Corp bid to take full control of Sky in 2011 as the fallout from the phone hacking scandal made it too politically difficult to complete.

There has been speculation that Fox will launch another bid for full control of Sky and Murdoch was asked at the AGM about a potential renewed bid. Murdoch said the meeting was not the forum to talk about “hypothetical scenarios” but added that Sky had “robust processes and procedures in place to deal with any related party transactions”.

Sky decided against informing or consulting shareholders about the appointment of Murdoch, although there is no legal corporate governance requirement to do so. In the four years since he moved into a non-executive directorship, investors have never voted against his reappointment at an annual general meeting.