Fox Corp.’s board of directors potentially violated its fiduciary duty and top executives ignored their responsibilities by allowing Fox personalities to lie about the 2020 election
According to its statement of corporate governance, Fox Corp.’s board of directors is responsible for overseeing “management of risks.” The board — with Chair Rupert Murdoch bearing much of the responsibility — has a fiduciary duty to act in Fox Corp. and its shareholders’ best interests. Boards typically oversee compliance with legal standards and help protect companies from financial and legal risks that could potentially harm long-term value.
As revealed in Dominion’s February 27 filing against Fox Corp., Rupert Murdoch and other board members knew that Fox hosts were lying about the 2020 election — and by extension, Dominion. According to the filing, at least two board members understood this to be both unethical and bad for the company.
Former Speaker of the House and board member Paul Ryan said it was his “fiduciary duty” to tell Rupert and Executive Chairman and CEO Lachlan Murdoch that Fox “should labor to dispel conspiracy theories if and when they pop up.” He later expressed to Lachlan Murdoch (who then shared it with Rupert Murdoch) that pushing back on election denialism is “a key inflection point for Fox, where the right thing and the smart business thing to do line up nicely.” (The Yale School of Management’s Jeffrey A. Sonnenfeld described his efforts as “cowardly, ineffective, and immoral.”) After the January 6 insurrection, board member Anne Dias told them that “the time has come” for Fox News or the Murdochs “to take a stance” as it was an “existential moment for the nation and for Fox News as a brand.” However, these efforts failed to move the needle: Fox News continued to lie.
Even Fox’s chief legal and policy officer, Viet Dinh, said no when asked whether Fox should “broadcast election fraud allegations that it knows to be false” and said executives had an obligation to “prevent and correct known falsehoods.” Despite this acknowledgment, it appears that neither Dinh nor other Fox executives, including Rupert Murdoch, compelled hosts and guests to stop spreading baseless conspiracy theories about the 2020 election and Dominion.
According to Sonnenfeld, the Dominion filings show that Fox Corp.’s board “failed to act to prevent misconduct by Fox executives.” The board thus left the company exposed to severe legal repercussions, including defamation suits. According to TheWrap, while the Dominion suit might not “sink” Fox Corp., it could open up the company “to other mounting financial troubles — any one of which could deal a potentially fatal blow.”
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March 09, 2023 at 02:44AM
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By embracing election denialism, Fox Corp. seemingly defied what its shareholders deem to be responsible corporate ... - Media Matters for America
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