James Murdoch’s links to the News International (NI) phone hacking scandal continued to take their toll today as he stepped down as chairman of satellite broadcaster BSkyB.
Murdoch, who relinquished his role as NI executive chairman in February, said in a letter outlining the reasons for his departure he did not want his role as chairman to become a “lightning rod” for BSkyB.
The deputy chief operating officer at News Corporation, BSkyB’s controlling shareholder, will stay on the board as a non-executive director and be replaced by deputy chairman Nick Ferguson.
Murdoch leaves the position just weeks before a Government report is published into reporting practices at the News of the World and an expected appearance alongside his father Rupert, News Corp chief operating officer, at the Leveson Inquiry.
His departure comes despite receiving backing from BSkyB shareholders, who reappointed him at the company’s annual general meeting last November. Murdoch recently stepped down from the boards of auctioneer Sotheby’s and pharmaceutical firm GlaxoSmithKline.
Murdoch, who was appointed BSkyB chairman in December 2007, said: “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.
“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.”
Tom Mockridge, chief executive of NI, which publishes The Times, the Sunday Times and the Sun, as well as the News of the World (NotW) before it was shut down, will replace Ferguson as deputy chairman.
Murdoch said in a letter to the Department for Culture, Media and Sport (DCMS) Committee last month that he accepts his share of the blame for not uncovering phone hacking at the NotW sooner but denied he had turned a “blind eye” to allegations of criminal wrongdoing.
He was not reappointed as BSkyB chairman with ease, as a number of top investors raised concerns over how his links to the phone-hacking inquiry could damage the company’s reputation.
The DCMS committee is reportedly considering censuring him for failures to fully investigate allegations that accessing the voicemail message of celebrities and others was widespread at NI.
Media regulator Ofcom is likely to extend its inquiry into Murdoch if the parliamentary committee finds against him. It is considering whether he remains a “fit and proper” person to oversee an organisation with a licence from the regulator.
Ferguson heaped praise on his predecessor following the announcement.
“With his vision, drive and strategic insight, the company has performed exceptionally,” he said. “The board’s support for James and belief in his integrity remain strong.”
Murdoch received the support of 75.4% of shareholders, with 17.4% opposed and 7.2% withheld, at last year’s annual meeting.
BSkyB stood by its chairman and said there had been “no effect on sales, customers or suppliers” in the wake of the phone hacking allegations.
Murdoch said he decided to step down from NI to devote himself to other roles at News Corp – not because he had known about alleged criminal wrongdoing at the News of the World.
The accusations first came to light last summer when it emerged the phone of murdered teenager Milly Dowler was hacked by a private investigator employed by the newspaper.
In a statement Mockridge said: On his appointment as Deputy Chairman of BSkyB, Tom Mockridge said: “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 on-going 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.”