Yesterday’s appearance by James and Rupert Murdoch in front of a Parliamentary committee was one for the ages. It was remarkable not only in how rare it was for an American company to face questioning before the UK’s governing body, but in the degree to which it demonstrated just how far the company has fallen and how much work it must do to rebuild its now shattered reputation.
One thing is clear: News Corp. faces a looming reputation and credibility challenge. No matter how many times Rupert Murdoch claims that the hearing amounted to the “most humble day of my life,” he must still atone for the illegal and unethical acts of some within his company.
Furthermore, News Corp.’s disastrous response to this scandal proves that public relations should be at the top of a CEO’s skill set.
Overall, I would grade the Murdochs’ performance as satisfactory.
James seemed to be well attuned to the day-to-day operations of the company, as you would expect given his experience previously running News International and his deputy-COO role at News Corp. Rupert, on the other hand, while somewhat conciliatory, came off as aloof and out-of-touch with the management and editorial decisions made by a company for which he is chairman and CEO and owns 40 percent.
Furthermore, his defense that he wasn’t made aware of certain decisions that are now being called into question comes off as shirking responsibility. He’s “passing the buck.”
From a reputation-management perspective, the responsibility for both the performance and credibility of the company ultimately falls upon its chairman.
Neither Rupert nor James Murdoch made great lengths to repair the damage of News Corp. In continuing to make excuses for the actions of his top lieutenants, in a setting in which he had the prime opportunity to atone for the company’s unethical activities, Rupert Murdoch has demonstrated a profound lack of understanding of how his actions and words influence the public’s perception of his company and its employees. Both must take demonstrative steps to show that humility or risk News Corp.’s reputation to continue to falter and the public’s trust to diminish.
As a woman, I found Wendi Deng Murdoch’s performance following the pie-ing attempt — without saying a word — the most interesting. Without hesitation, she leaped to openly defend her husband. In many ways, you have to admire a woman, who is willing to go to that length of defense and protection publicly, regardless of the very negative situation. For all the business analysis we do on his comportment and decorum, this was simply a small, more human telling sign as to the Murdoch family as a unit.
As for what News Corp. can do now to restore its brand perception, two things likely need to happen, one symbolic, and the other concrete:
- Rupert Murdoch should resign as CEO. This will have the reputational impact of assuring shareholders, the public and the media that he is no longer in charge of News Corp.’s day-to-day operations and that the company is turning a new page in its management operations.
- A commitment to transparent and forthright communications. The firm must come forward and address who within the company knew what and when. The excuses that both Murdochs laid out yesterday that many others on Fleet Street have been hacking may have some truth to it (time will surely tell), but it does little to win the public back on its side. If anything, it makes them more complacent toward, and almost condoning, bad behavior.