The call by News Corporation's institutional investors to overhaul its board of directors has reignited the debate over splitting the role of chairman and CEO of a public company.

Christian Brothers Investment Services, a shareholder of News Corp. and an adviser to Catholic organizations on investment decisions, will introduce a floor resolution calling for the split of the two roles at News. Corp.'s annual shareholder meeting Friday in Los Angeles.

Julie Tanner, assistant director of socially responsible investing for CBIS, pointed to concerns over the board's handling of the News of the World phone hacking scandal and, most recently, the concern over Wall Street Journal Europe's use of a consulting firm to artificially boost circulation numbers as reasons that changes are necessary. She also pointed to concerns over executive pay, as Rupert Murdoch received over $33 million in total compensation last year despite the scandals.

The hope is that the board, through the resolution, will take action and take the steps to address shareholder concerns, Tanner told the International Business Times. They have not done that yet.

A spokesman for News Corp. couldn't immediately be reached for comment. But last week, the company defended its leadership. In a statement, the company conceded that the News of the World phone-hacking scandal could affect the short-term finances of the company. Nevertheless, the company said the current board has been beneficial for shareholders' interests.

Our broad, diverse group of businesses across the globe is extremely strong today, the statement said. The drivers of our business are intact, our position is strong and our future is promising.

A MOVEMENT TOWARD CHAIRMAN/CEO SPLIT

Unlike their European counterparts, who largely separate the roles of CEO and chairman, American companies tend to designate one person for both roles.  

However, this appears to be changing. GovernanceMetrics International, a shareholder advisory firm focusing on corporate governance, notes that the chairman and CEO of 290 of S&P 500 companies (58 percent) are the same people, down from 326 companies (65.2 percent) five years earlier.

GMI ranks corporations based upon what they view as good corporate governance. News Corp. was recently put on GMI's Risk List- a list of 10 companies with specific patterns of risk that GMI believes are critical for investors and other corporate stakeholders to monitor.

Companies with separate CEO's and Chairmen receive higher scores. But the catch is that the board leader must be considered independent, which GMI defines as no former ties to the company either through business dealings or as former employee either in a CEO, other executive, or management employee, and no family ties to the CEO.

Of the 210 companies that have split the role of chairman and CEO, GMI notes that only 70 board leaders fit the criteria of independent.

In some instances, it may make sense for a former CEO to serve as executive chairman of the board while the new company head becomes acquainted with his job¸ Paul Hodgson, Chief Communications Officer of and Senior Research Associate for GMI, told IBTimes. For example, he said that it made sense for Steve Jobs to take on the role as executive chairman of Apple in order to provide guidance to new CEO Tim Cook.

Tanner said CBIS has introduced similar resolutions for other companies, including Time Warner and Goldman Sachs, although Jeff Bewkes of Time Warner and Lloyd Blankfein of Goldman Sachs still head both the board and the company management.

Although passionate about the changes, Tanner is also realistic about the chances of the resolution passing. Murdoch and his family own about 12 percent of total News Corp. shares, but control approximately 40 percent of the shareholder vote. This is due to a dual-class structure of stock, where Class A shares are purchased by the common individual but Class B shares allow for voting rights.

WILL A SPLIT MAKE A DIFFERENCE?

Hodgson said the firm usually supports a split between the chairman and CEO roles, as he said that splitting the roles generally leads to a board more focused on oversight.

But not everyone is convinced that merely splitting the role of chairman and CEO will lead to positive changes for the company. Beverly Behan, an independent board consultant and author of Great Companies Deserve Great Boards, isn't opposed to an independent Chairman for News Corp. However, she told IBTimes that the larger issue in the case of News Corp. is the lack of board independence.

Other advisory firms share Behan's concern about independence and are calling for a complete restructuring of News Corp.'s board. Last week, proxy firm Glass Lewis called for the removal of six News Corp. directors (the firm also supports CBIS's resolution). Proxy firm Institutional Shareholder Services has taken it a step further, calling for the ouster of 13 of the 15 directors.

Behan said at least two-thirds of company directors should be independent, while News. Corp. is only slightly more than half (seven directors have ties with the company). However, she believes that some of News Corp.'s independent directors aren't truly independent. For example, she points to 31-year-old Natalie Bancroft, who was appointed to the board after the company acquired Dow Jones in 2007. Furthermore, independent director Andrew Knight served as an executive with the company back in the 1990's.   

For companies that combine the chairman and CEO positions, the board usually has a lead independent director. For News Corp., that person is Rod Eddington, a former CEO of British Airways. Behan said a company with an independent director, including News Corp., can succeed in providing successful oversight if the board can stand up to management and are willing to make leadership changes.

Someone is going to need to tell him (Murdoch) eventually that it is time to step down, Behan said, noting that since Rupert Murdoch is 80 years-old, the lead independent director should help craft a succession plan.

The job of the board is to oversee leadership, she said. Why would anyone not do this?

Bob Arciniaga, the founder of Advisory Board Architects, said another problem with the board is its size. By getting rid of some of the company insiders on the 15-member board, he said meetings would run smoother.

Past eight to 10 board members, things kind of fall off a cliff, Arciniaga told IBTimes.

Still, more independence has not solved all problems. Take Hewlett-Packard. Although the board is mostly independent, Arciniaga notes that the group has been scorned by corporate governance experts over the company's executive compensation practices and high turnover amongst executives.

Tanner agrees that merely splitting the role between chairman and CEO will not be a panacea to News Corp.'s corporate governance issues. Nonetheless, she believes a truly independent leader should lead to greater transparency and oversight of the company.

 It depends on who is appointed and what actions the person takes, Tanner said.

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