Investors v Murdoch
This statement was given to the BBC last night by Anne Simpson, who is in charge of corporate governance at Calpers (Californian Public Employers Retirement System), one of America's most influential investors:
"News Corp does not have one share one vote. This is a corruption of the governance system. Power should reflect capital at risk.
"Calpers sees the voting structure in a company as critical. The situation is very serious and we're considering our options. We don't intend to be spectators - we're owners."
Calpers owns 6.4 million News Corp shares. And what exercises it is that News Corp has two classes of share, Class A shares and Class B shares, which are identical in every way except that Class B shares have voting rights at the annual meeting and Class A shares don't.
The resonant point is that because Rupert Murdoch controls around 40% of the Class B voting shares (or at least that's what public disclosures say he controls), he is able to exercise what is perceived to be near total control over the business, without needing to own all the shares.
That is why Calpers complains that "power should reflect capital at risk". Calpers perception is that Mr Murdoch has more power than is fair on the basis of the capital that he and his family is risking.
To be clear, this is not a new complaint. Some investment institutions have been belly-aching for years that all shareholders should be treated the same, that they should all have votes.
That demand to turn News Corp into a more conventional company, with just one, unified class of shares, is intensifying because of the scandal at the News of the World, which is doing so much damage to the global reputation of News Corp.
And Rupert Murdoch's performance in front of MPs yesterday did nothing to reinforce the idea that the status quo is sustainable, investors tell me.
They point to a contradiction in Mr Murdoch's argument about why he can't be blamed for the scandalous practices at the News of the World.
On the one hand, he thumped the table and said that as chairman and chief executive of a global media company, with 53,000 employees, he could not be expected to know the detail of the practices at an operation, the News of the World, which represented only 1% of News Corp's total business.
The problem for Murdoch is that - at the age of 80, looking tired and disappointed - he was not the identikit, model, multinational CEO that most investors would expect.
His answers were frequently slow and halting. And more often than not, even after being briefed in recent days about what happened at the News of the World, he was still not a master of the detail of events at the now closed Sunday tabloid.
To be clear, as the distinguished Sun journalist, Trevor Kavanagh (a News Corp employee) said today on the Today Programme, Rupert Murdoch has never been a super-slick communicator. But Mr Kavanagh conceded that even Mr Murdoch cannot defy the ageing process.
Mr Murdoch's answers to MPs may well have been the right ones to protect him and his family from charges of complicity in wrongdoing at the News of the World. But they were not the answers that bolster investors' confidence that News Corp has an effective governance and management structure that will prevent a repetition of the disaster.
If you want a tangible sign of how the myth of the fearsome, formidable Mr Murdoch was dented yesterday, listen to remarks made this morning on 5-Live by Jeremy Hunt, the culture secretary - who said that Mr Murdoch's disclosure of how little he knew of what happened at the News of the World was surprising, and would be relevant to a possible future review by Ofcom, the media regulator, of whether British Sky Broadcasting is fit and proper to hold a broadcasting licence in the light of News Corp's ownership of 39% of BSkyB.
Or to put it another way, shareholders, politicians, rivals all see Mr Murdoch as less powerful today than they did yesterday.
One relatively small shareholder, Christian Brothers Investment Services Global Funds, which has just under 31,000 of the voting shares, is planning to put a resolution to News Corp's annual meeting, calling for the end of Mr Murdoch holding the two most important roles at News Corp, chairman and chief executive.
To state the obvious, it is unusual in a public company for an 80 year-old to continue to be the senior executive. But Mr Murdoch said yesterday he had no intention of standing down. He insisted he was the "best person to clean this up".
On a human level, given that he created the global empire that is News Corporation, anyone can see why he would not wish to bow out, at this moment of greatest humiliation for his business.
But many investors take precisely the contrary view - which is that the disaster at the News of the World proves that too much responsibility has been concentrated in a single individual's hands.
Rupert Murdoch believes that News Corp is - in essence - a family business. But if his son James Murdoch were appointed chief executive at this juncture, there would be a storm of protest from shareholders - because James Murdoch is himself under the News of the World's cloud, having been in charge of UK operations during the long years between the malpractices at the Sunday tabloid and the transmission to the police of evidence of alleged widespread criminality.
Like his father, James Murdoch's defence is that he was kept in the dark by colleagues of the extent of alleged phone hacking and bribing of police.
Ignorance may well be a defence in law. But few investors would see it as the ideal top line in an application to be head of one of the world's largest media groups.
All of which means that the non-executive directors of News Corporation - who include the former BA chief executive Rod Eddington, and the erstwhile Goldman Sachs banker John Thornton - face a formidably difficult job reconciling the interests of the Murdoch family and the interests of other News Corp shareholders.
This is the moment of maximum danger for the Murdoch dynasty in relation to whether it can keep control of the house that Rupert built.