In advance of News Corp.'s annual shareholders meeting this Friday, shareholders are raising concerns about the company's $1 million political contributions to the Chamber of Commerce and the Republican Governors Association.

This morning, The New York Times reported that News Corp. shareholder Nathan Cummings Foundation has challenged News Corp. to fully disclose its political spending to shareholders this Friday, citing concerns that chairman and CEO Rupert Murdoch's “apparent use of corporate funds appears to be motivated by individual political ideologies rather than the promotion of shareholder interests.” (You can read their letter to the News Corp. board here.)

Now, another News Corp. shareholder, F&C Investments, says it will oppose re-election of the Chairman of the Audit Committee -- Sir Roderick I. Eddington -- at the annual meeting in response to the donation controversy.

From an F&C statement obtained by Media Matters:

News Corp. Donations Controversy Illustrates Need for Corporate Controls

In response to recent media reports that News Corp. has used shareholder funds to make two $1 million contributions to election-related activity in the United States, F&C has opposed the re-election of the Chairman of the Audit Committee at the upcoming annual meeting this Friday.

“We are concerned to see the company deploy shareholder funds for activities that are best left to the individuals whose views they reflect and are not obviously a business matter for the company,” said Karina Litvack, Head of Governance and Sustainable Investment at F&C. “While it is perfectly reasonable for companies to engage in policy debate on specific matters that affect their business, there needs to be a clear and transparent process to ensure that such activities serve the interests of shareholders. There is no evidence of a political contributions policy or process at News Corp. - and the board does not have an explicit oversight role.”

F&C's global proxy voting guidelines have long urged companies to observe clear policies governing political donations, including a reasoned decision-making process and clear assignment of employees responsible for formulating a strategy. F&C also looks for useful and timely public disclosure of both donations and substantial membership in politically active trade associations.

UPDATE:

The Financial Times has picked up the story and notes that F&C is a “long-term” shareholder for whom this “public statement of opposition is unusual”:

She [Litvack] told the FT that F&C held almost 78,000 shares in News Corp, a stake worth about $1.1m in a company with a $36.5bn market capitalisation, and that it had been a long-term shareholder. “We're not the kind of investor that buys into a company to make a point,” she said.

[...]

The public statement of opposition is unusual for F&C, which communicates its policies to the companies in which it invests but usually informs companies of its reasons for a protest vote only after annual meetings have been held. Ms Litvack said F&C had singled out News Corp's audit committee chairman, Sir Rod Eddington, because the committee should oversee internal controls.