Rupert Murdoch under attack: Corporate governance and custard pie

Rupert Murdoch’s appearance in front of the House of Commons Culture, Media and Sport Select Committee exposed a host of corporate governance issues.


Rupert Murdoch’s appearance in front of the House of Commons Culture, Media and Sport Select Committee exposed a host of corporate governance issues.

While the headlines will focus on the young man who attempted to attack Rupert Murdoch with a mock custard pie, and the way his wife fought back against the assailant, the media magnate’s inability to answer a series of key questions was the most significant feature of the hearing.

Murdoch senior has ultimate responsibility for corporate governance at News Corporation and its News International subsidiary, and Murdoch admitted that the oversight of operations had failed.

Murdoch flatly refused to accept personal responsibility for the phone hacking scandal that has engulfed his media empire, instead blaming those he delegated to run his business units and those who they appointed to investigate wrong doing when it emerged.

In their answers to the committee, Rupert Murdoch and his son James repeatedly said they did not know of crimes or misdemeanours, until very late in the day.

While few organisations have ever had allegations of institutionalised criminality levelled against them, the experience of watching the Murdoch’s admit to the failings of their organisations will put a renewed focus on corporate governance in organisations round the world.

Here we detail key developments in the company’s phone hacking scandal, look at the key issue of email retention policies and highlight the hacking attack on the Sun’s website, which revealed elementary security flaws.

News of the World saga: Email management lessons
Allegations of News International executives ordering the deletion of emails – around possible phone hacking by News of the World journalists – are prompting IT professionals to question their own email and document management policies. Lawyers have warned that all organsiations need to ensure their email retention policieis and practices are robust.

19 July - The Sun hacked: How it happened
A fake ‘Murdoch dead’ news report, placed on newspaper The Sun’s website during a hacking attack last night by Lulz Security, has prompted a massive IT security crackdown at parent company News International.

19 July - Phone-hacking inquiry MP is Facebook friends with Murdoch
An MP leading the inquiry into the News of the World phone hacking scandal has been exposed as being Facebook friends with Les Hinton and Elisabeth Murdoch, highlighting the perils of carelessly adding everyone you meet as a connection on the social network.

15 July - News International facing email raid as Brooks steps down
Police are understood to be trawling through thousands of emails containing potentially damning information, as investigators probe the alleged grave malpractice by News of the World journalists who were attempting to get a story. The FBI is understood to be beginning a similar investigation in the US.

Mobile operators beef up voicemail security as hacking scandal grows
As the phone hacking saga continues to grip the country, mobile operators are saying that spying on someone's voicemail messages wouldn't be possible today as several weaknesses in the systems have been eliminated.

11 July - News of the World email investigation under new police spotlight
Police are questioning whether a change in News International’s email retention policy was part of an effort to conceal widespread phone hacking by the News of the World, a scandal which is threatening Rupert Murdoch’s planned takeover of BSkyB.

Photo: World Economic Forum

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