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Who Knew?

Optimize Blog - July 7, 2011 - 0 comments

Yet more companies have withdrawn their advertizing support in the wake of the News of the World phone ‘hacking’ scandal.
It is alleged that the News of the World has been illicitly hacking into the voicemail messages of prominent people to find stories. The tabloid, a sister paper to The Times and The Sunday Times, admitted intercepting voicemails in April after years of rumours that the practice was widespread. It is not yet known how exactly many phones have been hacked but police are investigating and estimate the numbers to be in excess of 4,000. Those targeted are said to include celebrities, sport stars, politicians, victims of crime and even dead British soldiers’ relatives.
After a disappointingly long delay, the British government has promised a public enquiry… many commentators are pointing to the personal friendship between British Prime Minister David Cameron and the current Chief Exec of News International, Rebekah Brooks, as a possible factor in this delay. Claiming to have ‘been on holiday’ at the time of some of the worst hacking episodes, Brooks seems to be laying the blame at the feet of her one-time deputy and previous editor of The News of The World, Andy Coulson. Just to add a little further opacity to how this might be perceived, Coulson moved on to become Director of Communications for David Cameron’s Conservative Party.
The claims appear to lend credibility to claims that Rupert Murdoch, owner of News Corporation which ultimately owns the News of the World, is thought to retain his loss making newspaper businesses because of the political influence that they can collectively bring to bear.
The scandal does not end there and the British Police are also facing questions over the relationship between its officers and the papers. News International uncovered e-mails indicating tens of thousands of pounds were paid over the years to police officers.
Although there will be advertizing revenue losses, so far the main harm has been to the company’s reputation and the company’s shares dropped 3.6 percent on Wednesday to $17.47, after rising for most of the year. The episode could also threaten the biggest deal on the News Corporation’s plate as it awaits UK government approval of its complete takeover of BSkyB, the satellite television company in which it already holds a 39% stake.
So what can we learn from all this, apart from the obvious? Well, if the owners at News Corporation were not aware of the phone hacking, as they have claimed, then the issue of governance needs to be considered.
Governance is a much misunderstood discipline at the leadership level from the perspective that the scope of the term is often limited. The point being that Governance is not just about control. Ensuring that processes are efficient as well as effective allows business units to respond more quickly and also by reducing waste, errors and re-work there can be real, tangible cost savings.
Good governance allows the leader to manage with confidence in the knowledge that, if adhered to, the relevant processes provide an outcome that is predictable and consistent and provides the best opportunity for success. In dynamic, complex and resource constrained organizations, the requirement for leaders to stay ‘in control’ of their environment is critical. Appropriate governance frameworks allow the leader to efficiently manage the way business is executed.
As Mr. Murdoch is hopefully realizing, good governance is essential. As a leader, it is imperative to make sure that you have the right level of governance to enable you to be effective in your role… but don’t confuse it with micro-management though. Implement standards, good practice and be clear with your expectations and then make sure that they are being followed.
For a business to succeed in the increasingly complex, uncertain and volatile business world it is essential that core processes have critical governance frameworks to ensure that the leader can effectively remain accountable for the performance of the business unit. Adherence to processes that work will provide confidence to the leader that the team are behaving as required and to standards that have been thought through and are fit for purpose.
***** UPDATE: Rupert Murdoch announces that The News of The World is to cease publication by the weekend *****

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