22 August 2012

After its very public troubles, News Corp, the Murdoch media empire is to eat humble pie.  Having initially refuted  any serious misconduct allegations, the evidence given to the Leveson inquiry has apparently placed the Board in a position where it feels a need to be seen to be responsive to public opinion. Senior members of the company had given evidence that they were unaware of the continuing and coordinated hacking into the phones of not only prominent people but also a murder victim.  If they were so ill informed of how the business operated, they could hardly avoid introducing much tighter operational controls.

News Corp is now to have a global ethics team.  The team will be led by a compliance officer responsible for enforcing ethics and a particular focus on raising awareness of anti bribery laws. This new role for the current general counsel is to eliminate the circumstances which have painted News Corp staff as amoral if not unlawful.  With more than 60 arrests related to the News Corp activities, and prosecutions underway in more than a dozen cases,  likely convictions will confirm that the story-gathering activities of News Corp staff were criminal.

Reuters has reported that the experience  “has rocked Murdoch’s News Corp titles in Britain, put the notoriously aggressive British press under the spotlight with a far-reaching investigation into media ethics, the Leveson Inquiry, and embarrassed senior politicians, including British Prime Minister David Cameron, over cozy ties…”  Murdoch has been described by an influential commentator as unfit to run a major  company.

The explanation given to the company’s employees is that … “ our company has been under intense scrutiny in the United Kingdom. I assured parliament and the Leveson inquiry that we would move quickly and aggressively to redress wrongdoing, co-operate with law enforcement officials and strengthen our compliance and ethics programme company-wide. With the support of our board of directors, I am pleased to tell you that we have made progress on each of these important steps.”

The company needs to be aware that having standards is not sufficient. The importance of the “6 trust elements” is as applicable in the commercial sector as it is in government. Once standards are promulgated, they need to be promoted widely and regularly throughout the company.  The underpinning principles, embodied in company policies, must reflect the standards. Managers must model those standards and ensure staff have confidence that there is a total commitment to abiding by them.  There needs to be prompt and effective action when breaches are discovered and staff need to understand that enforcement action if breaches occur will be swift and unavoidable.

  • Standards must be set.
  • Staff must know what the standards are.
  • The standards must be central to “the way we do things around here”.
  • Managers must “walk the talk”.
  • Decisive action must be taken on breaches.
  • The consequence of a breach must be known by all.

The reluctance shown by News Corp to acknowledge it had a problem in the way staff operated to acquire stories, may not augur well for its advocacy of, and insistence on, higher standards of integrity.