Fox Corp Chairman Ben Sonnenfeld: Why do we need the Fox Corp board to act quickly and promptly to correct election lie allegations? An attorney general report

The Fox Corporation chairman is facing an ever-deepening scandal that threatens to cause considerable financial and reputational damage to the crown jewel of his media empire, Fox News, as well as the parent company he leads. The scandal, exposed by Dominion Voting Systems’ blockbuster $1.6 billion lawsuit, has unearthed damning information, revealing the right-wing talk channel, driven by financial interests, was willing to lie to its viewers.

The filings, he said, showed members of the Fox Corp board had failed to act to prevent misconduct by Fox executives, and warned the disclosures will result in “likely” shareholder lawsuits, a possible SEC investigation into “deceptive practices of the board for conspiring to conceal known misconduct with material adverse impact,” and the potential loss of insurance protection for the company’s directors and officers.

The board should remove high-ranking personnel, such as Fox News chief executive Suzanne Scott, from their roles if it is to act quickly, said Sonnenfeld, who has advised hundreds of CEOs.

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The board must remove officials who peddle known election lies, because it hurts the company’s reputation, Sonnenfeld told CNN by email.

Sonnenfeld said if the board does not act appropriately, it shows a failure of management oversight and jeopardizes their own directors and officers insurance protection.

Fox Corp. Director Paul Ryan and Fox News Incidents: Why the Murdochs Are Shuting Down Fox News for Donald Trump? A Deposition with Paul Murdoch

Paul Ryan, a board member for Fox Corp, was in discussions with Murdoch family members about preventing Trump from being broadcasted to millions of viewers on Fox News. The former House speaker said that Fox News should “move on from Donald Trump” and “stop spouting election lies.”

“The duties of loyalty and diligence are NOT to the management but to the owners,” Sonnenfeld said. “By silently going along with misconduct about which they are aware, all directors, including Paul Ryan, are guilty of complicity through their complacency.”

The vice chair at ValueEdge Advisors said she agreed with everything Sonnenfeld said. Minow said that she would tell concerned board members to “contact their largest shareholders to hear their suggestions for new independent directors.”

Minow also recommended Fox News immediately move to settle its case with Dominion, “even if it means changing the name from News to Not News and daily free ads 10 times a day in prime time for 10 years about the integrity and reliability of Dominion.”

There is no shortage of evidence to support the idea that Scott is on the chopping block. Most notably, during his deposition, Murdoch sought to distance himself from decision making at Fox News. Instead, he pointed to Scott: “I appointed Ms. Scott to the job … and I delegate everything to her,” he said. In doing so, Murdoch made the case that Scott is in charge of the network — and if there was wrongdoing, it rests on her shoulders. Murdoch is the person who calls the shots in the media. But it’s not hard to see how the company could advance this narrative.

Ben Smith, the editor-in-chief of the weekly media column, said Wednesday that the Murdochs are making Suzanne Scott take the fall for this.

This is not the first time that Murdoch has been faced with a serious and embarrassing matter in his media empire. In 2011, his now-defunct News of the World newspaper was ensnared in a phone hacking scandal. Ailes was accused of sexual harassment in a lawsuit. And in 2017, star host Bill O’Reilly was caught in his own sexual misconduct scandal.

In each case, Murdoch made the decision to sever ties with top personnel. As one source who once worked in Murdoch-world said Wednesday, “His pattern has been to throw some money overboard and offer a head or two in the process to make it go away.” Murdoch would be in a good position to oust Scott if he were to cut ties with him.

“Looking back to previous scandals, Murdoch and the companies have tended to try to pay early and quietly to make things go away, or they ignore them thinking they’re so big they can ride things out,” Folkenflik said. They try to get the wound to the lowest point possible when things get to a head.

He would only do it if he thought he needed to cauterize the wound before it went higher. “That’s his record. That’s what he does. It can be a part of the job. It can be executives. It can be more than that. He’s not throwing himself over the side.”

Folkenflik explained that a senior executive position in Murdoch’s company is the ultimate fall position. People understand that it is part of the job. You’re very well paid. It can be a somewhat nice life. If you fall out of favor with the sun king, or it is to his benefit, that’s part of the equation.”