Leading shareholders have questioned whether the son of media tycoon Rupert Murdoch is the right man to run satellite broadcaster BSkyB.
James Murdoch: Meet the new boss
Late on Monday, BSkyB's board appointed James Murdoch to be the company's new chief executive. The 30-year-old Mr Murdoch would be the youngest chief executive of any FTSE 100 company.
The Association of British Insurers (ABI) says he may not be the best man to run Europe's largest satellite broadcaster, and that the selection process may not have been fair.
But the man in charge of the recruitment process, Lord St John of Fawsley, praised the new BSkyB boss as "outstanding" among the 290 candidates for the job.
James Murdoch was previously head of News Corp's Asian pay TV subsidiary, Star TV. His candidacy had been championed by his father, whose News Corporation media conglomerate is BSkyB's biggest shareholder, with a 35% stake.
Other BSkyB investors, however, fear that the appointment will hand too much control to News Corp.
"We have serious corporate governance concerns that these changes do not appear to address," said an ABI spokeswoman.
BSkyB shares closed down 7.5p, or 1.1%, at 656p.
The issue is likely to come to a head on 14 November, when BSkyB is scheduled to hold its annual general meeting.
Some shareholders worry that with two Murdochs at the top, BSkyB's strong cashflow could be used to prop up the balance sheet at parent News Corp.
There has been speculation that some investors may use the meeting to demand that Rupert Murdoch surrender his role as BSkyB chairman as the price for installing his son as chief executive.
The National Association of Pension Funds - a powerful shareholder lobby - has already said it is calling on members to vote for the removal of Lord St John from the board, arguing that after 12 years he cannot be considered an independent non-executive director.
On Monday, the group also raised the possibility of a "nuclear option", in which investors would call an extraordinary general meeting to vote off BSkyB's entire board.
The company has appointed banker Jacob Rothschild to the post of non-executive deputy chairman under Murdoch Senior, in the hope of staving off such concerns.
What's in an age?
Next youngest FTSE 100 chief executive is Simon Wolfson, of Next, age 35
Youngest FTSE 100 chairman is Viscount Rothermere, of Daily Mail & General Trust, age 35
Non-executive director Fabiola Arrendondo of BOC is also 35
Executive director George Weston of Associated British Foods is 38
Oldest FTSE 100 director is Masao Inagaki, 80, who holds a non-executive post at WPP
And Lord St John told the BBC's Today programme that News Corp executives had played no role in the appointment process.
The nomination committee "had a list of 290 candidates", Lord St John said, "we brought it down to a shortlist of 15, all were interviewed by a headhunter, they were tested, we interviewed them."
"One always longs for the outstanding candidate, and James Murdoch was
the outstanding candidate. It was amazing when he came into the room, after five minutes every one of us on the committee was verging his way."
The new chief executive's father, Rupert Murdoch, said his son was following in the footsteps of "a series of successful chief executives".
"I feel confident that James will carry on their work and continue the company's success," he said.
The BSkyB succession dispute comes at a time when shareholders are becoming increasingly assertive.
Last month, shareholders in ITV merger partners Carlton and Granada blocked the appointment of Carlton boss Michael Green as chairman of the combined company.
Path to the top
James Murdoch said it was "a privilege to have the opportunity to play a part in the company's future".
The younger of Murdoch senior's sons, he dropped out of Harvard in 1995 to launch a hip-hop record label, Rawkus, with friends.
He later took charge of News Corp's internet operations, and helped set up the now defunct Australian telecoms venture One-Tel, before taking on the top job Hong Kong-based Star TV.
He is due to take over the day-to-day running of BSkyB from Tuesday.
James Murdoch's appointment makes him the youngest chief executive of any FTSE 100 company, displacing 35-year-old Simon Wolfson of clothes retailer Next.
Mr Wolfson is the son of a former boss of the company he now heads.