The board at Dow Jones (DJ) has had a problem since the first moment that Rupert Murdoch decided to offer to buy the company. As fiduciaries they were bound to act for all shareholders. But, they backed away from that obligation because they knew that the Bancroft family had voting control of Dow Jones. They acted as if they had no power to act, and, in many ways they did not.
But, the board has made a clever decision. It will now take the lead in negotiations with Mr. Murdoch and any other buyers. It can bring a deal to final terms. It can recommend a deal. It can vote in favor of a deal. If the Bancroft family wants to exercise it ability to veto all of this, then sobeit. The board will have carried out its duty to the best of its ability.
In some ways it is a surprise that the Dow Jones board has taken so long. Their duty began when the offer was made. Perhaps it was a courtesy to the family that has kept watch over the business for so long, even if they have not always done a perfect job. But, they should not have waited at all.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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