News Corp Chief Executive and Chairman Rupert Murdoch sits without his jacket after being attacked with a plate of white foam, during a parliamentary committee hearing at Portcullis House in London
News Corp Chief Executive and Chairman Rupert Murdoch sits without his jacket after being attacked with a plate of white foam, during a parliamentary committee hearing on phone hacking at Portcullis House in London July 19, 2011. Murdoch was attacked by a protester on Tuesday while giving evidence to a British parliamentary committee at which he defended his son and his company over a scandal that has rocked the British establishment. REUTERS/Parbul TV via Reuters

Shareholders of media conglomerate News Corporation continue to call for changes to the board of directors, as a major British shareholder advisory service announced Friday that it would vote against reinstating five board members -- including Chairman and CEO Rupert Murdoch and his two sons, James and Lachlan, at the annual shareholder meeting.

Hermes Equity Ownership Services, connected with the British Pension Fund, expressed concern about the News of the World phone-hacking investigation and the general independence of News Corp.'s board. The firm has called for an independent chairman of the board, replacing board members with outside directors and appointing an independent third party to conduct an investigation and report findings publicly.

News Corp. has not reacted with sufficient urgency to investor concerns about its board composition and corporate culture, Jennifer Walmsley, director of Hermes EOS, said in a statement. The time is right for the company to appoint an independent chairman and to rebuild trust, help correct the governance discount, and ensure that the interests of all shareholders are properly represented.

Hermes EOS has called for the ouster of Arthur Siskind, who serves as a senior adviser to Rupert Murdoch, and Andrew Knight, a former executive at News Corp. The vote will take place Oct. 21 in Los Angeles.

Earlier in the week, two major proxy firms called for sufficient changes to the board of directors. Glass-Lewis called for the ouster of six board members, including James and Lachlan Murdoch. Institutional Shareholder Services called for an even greater overhaul, requesting 13 of the 15 board members be removed, including all members of the Murdoch family. The two firms cited concerns similar to Hermes EOS.

Seven of the 15 directors currently serve as company insiders or are part of the Murdoch family (Lachlan).

A controversial circulation deal involving a Dutch firm and the Wall Street Journal Europe may further pressure shareholders to make changes to the board. The Guardian reported Wednesday that consulting firm Executive Learning Partnership bought 31,000 copies of its paper daily at heavily discounted rates. This helped boost circulation numbers to obtain better advertising deals, the newspaper reported.

News Corp. shareholders demanding change face a difficult battle. The Murdoch family owns about 40 percent of voting shares. Saudi Prince Al-Waleed bin Talal, who controls 7 percent of News Corp's voting shares, has expressed support for the current board.

Shares of News Corp. were up 0.53 percent to $17.21 in late morning trading.

Write to Samuel Weigley at s.weigley@ibtimes.com.

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