In the aftermath of the sexual harassment scandal at its Fox News division, 21st Century Fox has struck a settlement with a shareholder that is intended to overhaul the workplace culture at the network.
The agreement announced Monday calls for the creation of a new oversight panel — the Fox News Workplace Professionalism and Inclusion Council — comprising two human resources executives at the company and four independent experts. The council will provide written reports to 21st Century Fox directors and, in an effort to increase transparency, publish those findings on the company’s website.
The settlement was reached with a 21st Century Fox shareholder, the City of Monroe Employees’ Retirement System in Michigan, and was more than a year in the making. The agreement resolves a legal complaint that the shareholder filed in Delaware on Monday and includes a $90 million payment to 21st Century Fox from third party insurers, minus the cost of lawyers fees and other expenses.
The settlement helps to recoup the large financial toll that the harassment and racial discrimination crisis has had on 21st Century Fox. The company has incurred about $50 million in costs tied to the settlement of sexual harassment and discrimination allegations involving Fox News in a one-year period that ended June 30.
That figure does not include money paid out to two of Fox News’ most prominent figures after they each faced multiple allegations of sexual harassment: $40 million to Roger Ailes, the former chairman who was ousted in 2016, and $25 million to Bill O’Reilly, the cable news host who was forced out last spring.
“For far too long, corporate leaders failed to act against harassing conduct in their midst by treating it as isolated incidents,” Max Berger, founding partner, Bernstein Litowitz Berger & Grossmann LLP, which represents the shareholder, said in a statement.
He said that episodes of misconduct at Fox News and beyond “show that corporate boards have an obligation to implement policies and structures that will protect current and future employees from the widespread improper abuse of the past.”
For nearly 18 months, 21st Century Fox has been dealing with the repercussions of a sexual harassment scandal that exposed a workplace where women said they had feared reporting inappropriate behavior. The crisis led to the departure of Mr. Ailes, Mr. O’Reilly and several others at the network.
(Mr. Ailes, who died in May, and Mr. O’Reilly denied the allegations against them.)
The company pledged to clean up its workplace and foster a culture of trust and respect after the scandal first burst into public view in July 2016. Yet in the months that followed, allegations continued to surface at Fox News and in other divisions. And in February, the company granted Mr. O’Reilly a four-year contract extension worth $25 million a year, even though it was aware of at least six settlements involving harassment allegations against him.
21st Century Fox has said that in addition to management changes, it has hired a new global head of human resources and a new head of human resources at Fox News, expanded training and created more ways for employees to report harassment or discrimination.
As 21st Century Fox tries to move past the scandal, the United States attorney’s office in Manhattan is conducting a criminal investigation into Fox News’s handling of sexual harassment complaints. The company also faces continuing regulatory scrutiny in Britain over its $15 billion bid to acquire full control of Sky, the European satellite giant long coveted by Rupert Murdoch and his sons James and Lachlan, who control 21st Century Fox.
Some shareholders have expressed concern that 21st Century Fox’s management and its board failed to address the crisis and have risked the company’s reputation, operations and long-term value.
The settlement came at a time of uncertainty in the Murdoch media empire. The company has held preliminary talks in recent weeks to sell some assets, a development that shocked analysts who believed that the Murdochs had no interested in selling any part of the company until news of the discussions broke.
The four independent members of Fox News’s new workplace council include Barbara Jones, a former judge in the U.S. District Court for the Southern District of New York, and Brande Stellings, the head of the consulting services and corporate board services groups at Catalyst, which work to advance women in positions of leadership. Also named to the group were Virgil Smith, who was the vice president of talent acquisition and diversity at the Gannett Company, and Sylvia Ann Hewett, the chief executive of the Center for Talent Innovation and a member of the Council on Foreign Relations.
“The Workplace Council gives our management team access to a brain trust of experts with deep and diverse experiences in workplace issues,” Jack Abernethy, co-president of Fox News, said in a statement. “We look forward to benefiting from their collective guidance.”