In advance of the BSkyB AGM on November 29 Ian Greenwood, chair of the Local Authority Pension Fund Forum whose members have shares in the broadcaster as well as News Corp, explains why he believes there needs to be a change of management at the top of the media companies.

When News Corp dropped its bid to buy the remainder of British Sky Broadcasting earlier this summer it should have finally become clear to any institutional investor that phone-hacking was not just a parochial question of media ethics.

Four months later, as the Leveson Inquiry has begun its work, and more grubby details of the behaviour of some media outlets have emerged, it should be equally clear that this is a critical time for journalism and as such something that shareholders in media companies must take a close interest in.

For groups like the Local Authority Pension Fund Forum (LAPFF), for which I act as chair, the hacking scandal and wider questions of media ethics have rapidly become an important focus of engagement activity.

The Forum's mission is to ensure that the companies in which local authority pension funds invest adhere to high standards of corporate governance and social responsibility. Clearly the behaviour exhibited by some media organisations in the phone-hacking scandal therefore causes our members concern, so we have sought to respond rapidly.

In fact LAPFF had already been engaging with News Corp when the scandal intensified this summer following revelations that Milly Dowler's phone had been hacked. As many of our members now have increasingly globalised equity portfolios, a significant number held shares in News Corp.

As events unfolded rapidly in July, the Forum sought an urgent meeting with the company to seek to understand both the extent of the likely damage to the company, and what the board was planning to do to put it right. Ultimately we held a conference call with three of the company's directors later in the summer.

Whilst I can't divulge confidential details from that call, it's fair to say that the

board members involved did provide a comprehensive overview of how the company was seeking to deal with the hacking scandal. I personally believe that the directors we spoke to are doing their best in a difficult environment. But it is also the case that the Forum wants to see real reform at the company, and that involves reshaping the board, taking particular account of the likely focal point of reputational risk, James Murdoch.

I also told the directors that if James was recalled before the committee he was likely to see his reputation damaged further. This, it turns out, was rather prescient advice.

News Corp's AGM took place at the end of October and, given our concerns, the Forum recommended that its members oppose the re-election of James Murdoch, because of the reputational damage incurred through his continued presence on the board. We also recommended a vote against Rupert Murdoch in order to encourage a move away from the combined chair/chief executive structure.

Voting results released by the company reveal that James Murdoch's re-election was opposed by 35% of shareholders. However, when the Murdoch interest in News Corp shares is taken account of, actually 75% of non-Murdoch shareholders opposed him – a massive signal of discontent. Discussions are now underway amongst shareholders around the globe as to how to ensure that News Corp respects and responds to this unprecedented level of opposition.

Meanwhile, of course, James Murdoch's chairmanship of BSkyB has come under scrutiny. Again we have engaged with the company and again, whilst the tone of the engagement was cordial, the Forum has decided it is necessary to take a stand. We feel that, in light of events, the company needs an independent chair. As such we have recommended members oppose James Murdoch's re-election. The BSkyB AGM takes place on 29 November and, whilst we don't expect a revolt like that at News Corp, it is clear that other large investors share our concerns.

Finally, of course the question of media ethics is not just restricted to one family or one company, and LAPFF is seeking to engage with other listed media companies. Already it is clear that some will be more open to engagement to others, so we expect this to be a long haul.