CIO Symmetry

Jul 19 2011   5:38PM GMT

Phone hacking scandal reveals lack of corporate culture

Scot Petersen Scot Petersen Profile: Scot Petersen

If you could have heard News Corp. chairman and CEO Rupert Murdoch testify before Parliament on Tuesday, you might have almost felt sorry for him.

Or you might have said, “There but for the grace of God go I.”

If anything was revealed in Murdoch’s and his son James’ testimony about the British press phone hacking scandal, it’s that a corporate culture existed that enabled the illegal activity — ranging from invasion of privacy to blackmail.

When questioned by the Parliamentary committee, Murdoch exposed himself — with one-word answers and “I don’t knows” — as a corporate head that had no control of what was going on (yes, he may have had some in actuality, but for the sake of argument).

That lack of control, this corporate culture of unaccountability, has cost him — not to mention his stockholders — dearly. Already some of his employees have been convicted; others are being arrested as of press time. He was forced to fire longtime lieutenants. He had to close the News of the World tabloid and pull out of a lucrative deal to acquire a large satellite broadcasting company.

None of which may be as bad as the damage to the reputation of his media empire. Enemies of Murdoch’s media properties — and there are many — are dancing in the streets right now.

The lesson for the rest of us is accountability. We have written quite a bit this year about how the culture of innovation, IT business alignment and risk management starts at the top, from the CEO, and must be inculcated down through the mail room. That goes for any culture that is driving the business, in this case, a culture of professional ethics that did not exist or was merely given lip service.

Murdoch said that he can’t keep tabs on each one of his thousands of employees. True, no one can. But that’s why corporate culture is so important. It places the controls for success in the hands of each and every person in the company. If they do their jobs, the company wins.

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