I get CNN's Breaking News emails. I got one last week during Rupert Murdoch's questioning by the British Parliament's committee regarding the phone-hacking scandal that stems from News of the World and threatens to overtake the entire News Corp. The email was dedicated specifically to his statement that he did not consider himself "ultimately responsible for the fiasco," and that these were misdeeds of the people he trusted. In other words, he is blameless because he did not give direct orders and it was all his employees' fault.
Indeed, unlike Bernie Madoff he did not personally masterminded to rip off thousands of people; he did not instruct anyone to tap private phones and bribe police officials. For all we know he had no clue who poor Milly Dowler was until inquiries began. News Corporation holdings include over 100 newspapers, magazines and TV stations. He cannot possibly keep track of every single report they publish.
He could not recognize (or so he says) most of the names of people working for him. Also not surprising – News Corporation employs over 51,000 people worldwide. We cannot expect him to know every single one of them. I myself always argue that the Boss should deal only with the uppermost echelon of management.
Yet, he does know Rebekah Brooks very well. She's been making his scandalous rags Sun and News of the World profitable for nearly half of her life, climbing up the ranks with his personal support. She knew how to deliver what was needed and he liked it. In 1994, at 26, she hired techies to secretly wire the entire hotel suite for the interview with Princess Diana's beau. And that was just a start. Everything she did was ruthless, unsavory and amoral and Rupert Murdoch was promoting her for it.
I wonder what kind of conversations this boss and this top exec had?
RM: "Great job, great job, just watch yourself, don't get caught."
RB: "I do what I can to please you, sir. And don't worry – everything is under control, I hold them all by their balls."
RM: "That's my girl! Here's £3.5 million bonus. Just don't tell anyone."
And that's makes him personally responsible. He knowingly hand-picked this woman to be one of his top executives. Journalism has seized to be an honorable profession long time ago, but Ms. Brooks' tactics go beyond levels of immorality we've learned to accept. What kind of organizational environment he expected her to cultivate? He knew exactly what he was doing, and I hope the British law enforcement will see it that way as well.
The reason this case is a good topic of discussion here is that business owners frequently display deliberate negligence in their executive staffing and still don't feel responsible for their employees actions.
I know a national law firm specializing in consumer debt collections. Most of the cases come in a wholesale form: debt-owners, such as credit card issuers and mortgage companies, outsource collection of delinquent balances to such attorneys. This is very different from the regular law work when a counselor is face-to-face with his client. This is bulk work – individual attorneys never meet the plaintiffs. And that gives the principal partner the freedom to save on the quality of attorneys he hires. He gets them straight out of fourth-tier law schools for salaries of office workers, he does not train them, he throws them into regional offices and lets them "swim or sink." Meanwhile, thousands of cases get no attention and pass the statute of limitation.
There is no question in my mind that this is a violation of fiduciary duty to the firm's clients. So, did Rupert Murdoch violated his fiduciary duties to the public by keeping Rebekah Brooks and letting her to do "her thing"?
The Frustrated CFO 