With independent board members privately rebelling and institutional investors publicly complaining about inadequate corporate governance in the wake of the UK phone-hacking scandal, News Corp’s board of directors is scheduled to meet Tuesday in Los Angeles ahead of the company’s fiscal year-end earnings release the next day. Now the media giant’s Wall Street Journal is reporting that Elisabeth Murdoch and the media giant have shelved plans for her to join the board for now. The 42-year-old daughter of News Corp Chairman/CEO Rupert Murdoch was expected to join the board as part of her return to the company through News Corp’s acquisition of the Shine Group, the television-production company she runs. Rupert had even said in a news release in February that he expected her to join the board when the £415 million ($680 million) Shine acquisition was completed in April. News Corp independent director Viet Dinh said in a statement Friday that Elisabeth ”felt it would be inappropriate” to join the company board at its annual meeting later this year and the company’s independent directors agreed.

The timing is awkward because of shareholder concerns about News Corp corporate governance because of the UK phone-hacking scandal which has tarnished Rupert and son James and several top execs. The Murdoch family maintains a 40% voting stake that gives it effective control of the media giant. Three Murdochs — 80-year-old Rupert, 38-year-old James, and 39-year-old Lachlan — already serve on the company board. In all, seven of the company’s 16 board seats are held by Murdochs and News Corp executives. Meanwhile, the Shine acquisition is the subject of a shareholder lawsuit alleging that News Corp gave Elisabeth a sweetheart deal. Dinh said the board and Elisabeth Murdoch hope her decision to hold off joining the board ”reaffirms that News Corp aspires to the highest standards of corporate governance and will continue to act in the best interests of all stakeholders.” Elizabeth is not the only Murdoch scion under extra scrutiny: James has had to fend off calls from some BSkyB shareholders for him to surrender his chairmanship of British Sky Broadcasting Group PLC, which is 39% owned by News Corp.

Editor-in-Chief Nikki Finke - tip her here.