The Parliamentary Hearing into the actions of News Corp broke new ground and the whole matter has opened a new requirement for business analysts everywhere.
First, the questioning of Rupert Murdoch and his son on live international television was an extraordinary spectacle worthy of, say…Rupert Murdoch.
The opportunity to inquire into the most intimate details of corporate governance of one of the most powerful men in the world is extraordinary theater.
And, in this case, there was an element of human drama that would have been difficult to miss. Here was Murdoch being asked “what did you know and when did you know it?” He was given the choice that always dominates discussions like this one – what did you know about this scandal? What steps did you take? Obviously, the witness cannot say that he was fully informed and took actions to make things better for his company. Now that the dam has broken and there is a formal, legal inquiry, any actions taken that were protective have the taint of being conspiratorial.
So what could he say? He could say that he was a bad manager. Or he could say that he was foolish or stupid. Or he could say that he did not know.
But if he didn’t know and if he was a competent manager, then his son must have known. So there was a human drama of potentially throwing his son under the bus. Of course, his son was the Chief Executive and perhaps should have taken steps long ago.
Finally, there should be little question that this is not a “UK” problem as much as the Murdocks might have wished that it were. US law – foreign corrupt practices and licensing before the FCC – make this inquiry a US inquiry as well.
The new ground? In their answers the Murdochs referred frequently to their reform of the corporate governance committee. Clearly it would have been better to have had a Management and Standards Committee that reported to the independent directors. The corporate governance process would have been better protected and that decision may turn out to have been a multibillion dollar decision.
In the end, it’s hard to predict how extensive the damage will turn out to be. Business analysts everywhere will have to be even better at being able to assess events and processes like this one.
New ground at a minimum, indeed.