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Leadership
How should we assess Rupert Murdoch’s legacy?
Iconoclast: n. A person who attacks or criticizes cherished beliefs or institutions.
This on-going column is intended to challenge the status quo. Not always giving answers, not always right, but smartly challenging our own assumptions, actions, organizations and institutions.
A ship’s captain is responsible for the actions of his entire crew. Leaders who refuse to acknowledge responsibility for the actions of their employees should be robustly challenged, not let off the hook.
In September 2023, Rupert Murdoch announced he would become Emeritus Chair of the Boards of Fox Corporation and News Corporation. Over decades, through these very profitable companies, he had built a behemoth of a media empire that reshaped politics in several countries. Many people regard its assertions with the reverence usually reserved for religious scriptures.
In 2012, however, a British parliamentary committee judged Murdoch “not a fit person to exercise the stewardship of a major international company” adding he had displayed “wilful blindness” (a legal term). Journalists at his News of the World tabloid had hacked a kidnapped teenager’s cell phone. They kept deleting fresh voicemail messages, leading the police and her parents to believe she was alive. Hackings, routine affairs at that tabloid (and others), also ensnared celebrities and politicians; Prince Harry’s lawsuit is still being litigated.
Revisiting Murdoch’s (and his former heir-apparent son, James’) testimony at the end of his career is critically important. Top executives are rarely held accountable publicly for terrible failures of judgment because white-collar crimes are notoriously hard to prove. Usually, mid-tier executives who implement their decisions get blamed.
The committee investigating that horrible, non-partisan, easily understandable set of acts could have precluded the Murdoch empire’s subsequent assault on democracy and reset the public’s understanding of leadership by asking better questions than it did. Boards have dismissed other imperious executives guilty of far lesser failings when they publicly lost credibility with financial markets, regulators, and peers – and better successors have rejuvenated those companies.
“Asked if he 'ultimately' was 'responsible for this whole fiasco,' Murdoch said, 'No.' ”
Instead, the committee mostly asked the two men whether they had attended specific meetings, read specific emails, or authorized specific payments. Rupert Murdoch’s repeated “I don’t remember,” answers reminded me of Sargent Schultz, the sitcom character infamous for saying, “I hear nothing, I see nothing, I know nothing!”
Financial pundits opined that the hearings hadn’t damaged the Murdochs. News Corp’s shares rose sharply.
What could the committee have done?
When it asked if Murdoch had considered resigning, he replied, “I feel that the people I trusted, I don’t know who, … let me down … I think they behaved disgracefully, betrayed the company and me, and it’s for them to pay.”
The obvious, unasked challenge to this would have been: “You are seemingly saying that your hand-chosen executives were incompetent and failed to create strong processes. Your protégée, News International CEO Rebekah Brooks, was arrested. Others you personally hired are under criminal investigation. You are the head of a global news organization. How did you make so many errors of judgment?” (Murdoch rehired Brooks in an expanded role immediately after a jury found her not guilty.)
The committee could have continued: “The mere raising of the possibility of hacking a kidnapped teen’s phone should trigger multiple alarms. It did not. You either failed to craft the right culture or chose not to do so. Which is it? If a corrupt culture and/or an ineffective leadership team didn’t engender the hacking, can we attribute it to your company’s strategy?”
Murdoch insisted, “Frankly, I’m the best person to clear this up,” even though the scandal had imperiled News Corp’s plan to acquire the shares it didn’t already own of BSkyB, a satellite-TV broadcaster.
Asked if he “ultimately” was “responsible for this whole fiasco,” Murdoch said, “No.”
In doing so, he rejected a widely accepted leadership principle that inextricably intertwines command with responsibility: A ship’s captain is responsible for even mistakes made by no-name underlings.
The committee’s failure meant nothing changed in the Murdoch empire. Unchastened, Murdoch learned he could get away with poor leadership, dehumanizing cultures, corrupt policies, and non-existent or poorly structured procedures. Small wonder that repeated lawsuits against Fox have occurred due to failures that structurally resembled those at News of the World.
Murdoch is an anachronistic reminder of how CEOs used to behave. In its 1989 “America’s Toughest Bosses” article on CEOs, Fortune magazine noted, “We uncovered no violence.” His empire’s version of violence involved pumping out misinformation on a massive scale. These contributed to Brexit, Donald Trump’s election, climate change denial, the US Capitol attack, and the re-normalization of misogyny and racism – and to James Murdoch’s subsequent resignation, which he publicly attributed to “disagreements over certain editorial content published by the Company’s news outlets.”
A 2017 survey of CEOs by the consulting firm PWC revealed that 15% had experienced five or more crises in the prior three years, but 30% expected at least one in the three years to come. In a world where everything is changing, we don’t need to get better at dealing with crises. We desperately need ethical, competent CEOs who will assure most crises don’t happen.
Most leaders today adhere to far higher standards than Murdoch’s. They must also speak up vocally against the lionization of peers like Murdoch and arguably Elon Musk, whose boorishness Walter Isaacson casually (and wrongly) justified as his biographer. (I wonder whether Isaacson would also excuse antisemitism as being essential for being a genius).
Regardless of how many courses on ethics business schools (and law schools) teach, leaders like this will put society on a path to a dystopian future.
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