28 Jul. 2011 | Comments (0)
- Independent Directors Need to Step Up or Step Off, Lucy P. Marcus, HBR Blog Network, July 19. Excerpt: News Corp. independent board member Thomas Perkins (79), a director since 1996, said this on July 18: “I have a lot of faith in Rupert Murdoch. He’s a great guy, he’s a friend of mine. He's a genius. And I know he's devastated by this. Just devastated. And I worry about him, you know, physically, being about the same age.” News Corporation and the actions — or as some would note, the inactions — of its board highlight several important directions in the way that boardrooms need to be, and indeed are, moving. No longer will boards be able to conduct themselves behind closed doors without consequences. Investors have been loath to make waves when all was going well, but with the banking crises, HP, and now News Corp, investors are waking up to the fact that it is better to make changes in the good times than to be caught without trunks when the tide goes out.
- Corporate Governance 101: the buck stops with Rupert Murdoch, Suzanne Young, The Conversation, July 22. Excerpt: News Corporation shareholders would have been justifiably disturbed when James and Rupert Murdoch told this week’s UK parliamentary committee hearing that they could not be held responsible for the behaviour that led to the scandal currently engulfing their company. As anybody with a basic understanding of corporate governance will tell you, the buck ultimately stops with the chairman and chief executive. Just because Murdoch Sr. was not made aware of the claims of wrongdoing early, as both the chairman and chief executive of News Corp he is ultimately responsible. He and his board of directors are there to serve the company’s shareholders, while acting in accordance with all legal and regulatory standards and diligently applying risk management. Responsibility for the governance and culture of a corporate reside with the board and chair. They must delegate responsibilities to management, but also ensure that management is accountable to them.
- News Corp’s Damning Code of Conduct, David A. Graham, The Daily Beast, July 19. Excerpt: During his testimony before the Parliamentary Select Committee on Culture, Media, and Sport, James Murdoch repeatedly referred to News Corp.’s “code of conduct,” setting up the code as the cornerstone of ethics at the company, and potentially a “paragon” for journalists across the globe. His father, too, referred to it in a prepared statement that he was not allowed to read, saying, “Let me be clear in saying: invading people's privacy by listening to their voicemail is wrong. Paying police officers for information is wrong. They are inconsistent with our codes of conduct and neither has any place, in any part of the company I run.” Indeed, a look at the code of ethics reveals a series of alleged violations of the rules that would make a lesser media mogul blanch: Murdoch père called the hearing his “most humble day,” but remained defiant in the face of some questions and refused to take responsibility for crimes. James Murdoch, under questioning by a member of the committee, seemed unable to describe how employees were informed of and educated about the code. (News Corp. says all employees are sent the code.) But the code is relatively fresh—having last been updated in May of this year. “We have revised this Standards of Business Conduct to make it easier to read and use, and to clearly outline what we should all expect of ourselves as colleagues,” Rupert Murdoch, News Corp.’s CEO and chairman, wrote then—even as the scandal was looming and near to breaking open. “It’s an important responsibility and I’m honored to share it with you.”