A major investor advisory firm has recommended that shareholders of the News Corporation vote against the re-election of a vast majority of the media conglomerate’s board. That includes embattled Rupert Murdoch and his sons, who control the company. The firm, Institutional Shareholder Services, wrote in a report that the News Corporation’s incumbent directors, 13 out of 15 board members, failed to prevent the company from stumbling into a morass of corporate troubles. Chief among these is the phone-hacking scandal in Britain that has led to the arrests of several News Corporation executives, parliamentary hearings and a public apology by the elder Murdoch. Institutional Shareholder Services wrote that the phone-hacking revelations had exposed “a striking lack of stewardship and failure of independence" by the board. The scandal has cost the News Corporation financially. The company eventually closed News of the World after 168 years and scuttled plans to buy control of a major satellite television provider, British Sky Broadcasting, for about $12bn. Only two of the News Corporation’s director nominees, Joel Klein and the venture capitalist James Breyer, received the advisory firm’s approval, since they have served on the board for only a few months. Klein, who formerly served as the chancellor of New York City’s public schools, is helping supervise the phone-hacking inquiry. Institutional Shareholder Services also took issue with the News Corporation’s executive compensation plans, particularly the near-tripling of Murdoch’s cash bonus for the 2011 fiscal year to $12.5mn. Firms like Institutional Shareholder Services can hold great sway over public companies’ investors. Many large shareholders often follow proxy advisers’ recommendations. Still, the firm’s call to arms is largely symbolic, since Murdoch, the News Corporation’s chairman and chief executive, controls about 40% of the company’s voting shares. Prince Walid bin Talal of Saudi Arabia, who owns about 7% of News Corp.’s stock, publicly backed the company’s management in July. [Dealbook, 10/10/11]