Ethics and Integrity or the "Rupert Murdoch Story"

July 19, 2011:

Ethics and Integrity or the "Rupert Murdoch Story"

I recall a particular wave and emphasis on integrity and ethics when I attended Business School. Seemingly a new trend, co-curricular speakers were brought in to emphasize the importance of these values in "tomorrow's leaders". This was likely directly related to the Enron and WorldCom scandals of 2001/2002. Other scandals have broken since, we have seen the banking industry turned upside down over the past years, and yet in many areas the saying still prevails "Good guys finish last".

The current scandal surrounding News Corporation and Rupert Murdoch is interesting and once again turns the attention to ethics and integrity of today's leaders. Since the 1950s, Rupert Murdoch has built a global media empire with key media including the Wall Street Journal, the Times, FOX, Dow Jones Newswire, along with a growing stakes in media outlets in emerging markets such as India. Just last year, he increased News Corps stake in a venture with Asianet TV to 75% after investing a total of $345 million to control four TV channels in India.  The man has been on a shopping spree to build his empire and in 2010 his personal net worth was estimated at $6.3 billion according to Forbes: The World's Billionaires, published in 2010 (He ranked #117 by the way. Bill Gates and Warren Buffet still topped the charts with $53 and $47 billion, respectively… ranks 2 and 3. Interestingly, out of the top 20 billionaires, 7 have their residence in the United States, the land of the free, living the American Dream.)

Today, Rupert Murdoch finds himself front and center in a scandal feared to damage the reputation and brand of the News Corp empire, which reportedly has $66 billion in assets. Two senior executives resigned last week. The business' News of the World outlet, which for years has been accused and legally pursued for phone hacking, supposedly bears responsibility for hacking into the phone of a 13-year old girl who ended up being murdered. The hacker reportedly deleted messages giving false hope to the parents of the teenager. The news on television and the papers have been full of stories of individuals who felt victimized by the paper and its unethical tactics as Rupert Murdoch is hibernating with its team of advisors before heading to a committee meeting this week.

Can Rupert Murdoch claim total ignorance of the tactics employed by his employees to obtain information and stories? Clearly not if you believe all the stories and reports that have appeared in the news in relation to the scandal. Should we blame society, which has become increasingly hungry for insights into drama and detriment of others as evidenced by the plethora of "reality TV" shows in existence?

In either case, leadership and ignorance … not a likely pair. You cannot claim ignorance and refute responsibility when at the helm of an organization. Rupert Murdoch was reportedly planning to retire shortly and make way for succession by current COO Chase Carey. Retiring in the midst of the scandal, whether planned or not, is a tough option for a man of Murdoch's stature considering the brand and public perception. But in all honesty, considering the size of the empire, will this scandal bring the company to bankruptcy, I doubt it. Some additional branches and news arms will likely have to be closed, staff will continue to turn over, and yes, Rupert Murdoch will retire. Will select individuals go to jail for (supporting/encouraging) criminal activity? Possible and ideally it would send a message. I assume this will turn into a long, long, long investigation with a lot of finger pointing and … how much evidence?

Maybe in the business world we should change our thinking from "good guys finish last" to "without integrity and ethics, what goes up, must come down!" Without question, the story of News Corp will make for an interesting case study in business school five years from now. Topic: Ethics and Integrity.