This is a shift for Institutional Shareholder Services, and a recommendation that it has to know is doomed to fail. The investor advisory firm endorsed all of the board candidates last year when Rupert Murdoch‘s entertainment and publishing properties were combined at News Corp. But ISS is upset that the mogul adopted an anti-takeover plan called a poison pill in June when he split his assets between two companies: 21st Century Fox for entertainment, and News Corp for publishing. ISS now wants Fox shareholders to oppose Murdoch, his sons James and Lachlan, COO Chase Carey, and five Murdoch allies when they’re up for election to the board at Fox’s first annual meeting on October 18. In addition, the firm wants shareholders to support a resolution calling for an independent board chairman — Rupert is CEO and chairman — and to end the two-tier stock system that enables the Murdoch family to control 39.4% of the votes even though it owns just 14% of the all shares.

ISS says that Fox should have asked shareholders to vote on the poison pill because it “can lead to board entrenchment and deter legitimate acquisition offers.” A poison pill enables a company to thwart a hostile takeover attempt by selling existing investors additional stock at a discounted price, making a deal prohibitively expensive for the buyer. The firm adds that the board — mostly News Corp holdovers — has shown “poor stewardship in recent years” including “problematic compensation practices” and its “slow response to allegations of illegal phone hacking in the United Kingdom.”

But Fox says that ISS is “completely out of touch with reality” considering that News Corp shares appreciated more than 30% in the fiscal year that ended in June. The company has improved many of its corporate governance policies (partly in response to the hacking scandal) as it adopted programs designed to clarify and enforce ethical standards. “ISS’ disproportionate focus on historical matters underscores the widening credibility gap between ISS and our shareholders as its analysis consistently disregards the value we have created for our investors and the significant improvements we have made to our compliance programs.”

Another investor advisory firm, Egan Jones, has endorsed the Fox board but also wants shareholders to support the proposal to eliminate the dual stock classes.

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