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Rupert Murdoch

July 18, 2011

News Corp, Rupert Murdoch’s company is going through a tsumani these past two weeks.

The phone hacking and alleged bribery by journalists employed by Rupert Murdoch working at the now defunct News of the World is a full blown scandal. News Corp, Mr. Murdoch’s company, lost more than 6 billion dollars of its market value in one day!  In the past three days we learned that Rebekah Brooks, CEO of News International and the editor of News of the World was arrested, that Les Hinton, the CEO of Dow Jones (publisher of The Wall Street Journal) had resigned and finally (for now) that Sir Paul Stephenson, the head of Scotland Yard had resigned, all in the wake of the scandal. The FBI is investigating whether the phones of victims of the 9/11 terrorist attack have been hacked as well.

Mr. Murdoch and Rebekah Brooks (released on bail on Sunday) are scheduled to testify at parliamentary inquiries at the House of Commons this week.

Investigative journalism has it rightful and very important place in the media and society. It is not an easy job. Investigative journalists are asked to obtain secret information that can have significant repercussion on the lives of citizens. Government and corporate scandals have often been exposed by investigative journalists such as Bob Woodward and Carl Bernstein of the Washington Post who exposed the Watergate scandal in the 70s and Seymour Hersh of the New Yorker who revealed the Abu Ghraib torture of prisoners.

However there are ethical and legal limits not to cross. In the News Corp scandal, it is obvious that such limits have been trespassed.  Ethics codes are important but not enough. Margaret Simons, a media commentator says: “Those of us who have worked in media organizations know that it is rare for ethical codes to be referred to or taken seriously, if they stand in the way of getting the story. It is also almost impossible, particularly in this country, to enforce the codes.”

I suspect that could be true in the U.S. as well. This is a very serious issue because a free press is a corner stone of Democracy.

A legitimate question to ask is whether the hacking and bribery was to work of a few rogue journalists or whether the culture at News Corp is to blame. The ongoing investigations will tell. A scandal of this magnitude, involving so many parties, generally does not happen in a vacuum and is not just an accident but rather the result of an accumulation of wrong-doing that took place for a long time.

The wise question to ask when such events occur is whether this could happen to me, individually and corporately.

If the answer is a categorical “no” meaning “this could never happen to me (or my company)” we better be sure that it is the case, because self-delusion can be very dangerous and is the upmost betrayal.

However if we are not absolutely sure that such events could not possibly happen to us then we have some serious soul-searching to do and most likely actions to undertake, to protect ourselves and/or our company from self-combustion.

Sir Paul Stephenson said, following his resignation, that he had done nothing wrong and that he would not “lose sleep over his integrity.”

I hope we can all truly say the same.

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