News Corp: Don’t be yourselves. That’s probably the best tip for Rupert and James Murdoch as they prepare to face UK lawmakers over the phone hacking scandal engulfing the UK newspaper arm of News Corporation.
Rupert is used to pushing people around. James argues with a passion when challenged. These are great skills in business, but will be handicaps in an event that is part investigation, part show trial.
True, the pair have dealt with some potentially difficult issues. News Corp has pulled its controversial bid to take full control of UK satellite broadcaster BSkyB. Rebekah Brooks, a former editor of the News of the World newspaper at the centre of the hacking story, has stood down as chief executive of News International, the UK arm of News Corp. She is being replaced by someone who doesn’t have embarrassing links to British politicians. What’s more, the Guardian newspaper retracted one of its most serious allegations against News International.
Rupert is also to publish full-page apologies in his newspapers this weekend, and has said sorry in person to the family of the murdered schoolgirl whose phone was allegedly hacked. But he sounded a bum note in an interview with one of his own newspapers, the Wall Street Journal, when he said News Corp had made only “minor mistakes” in its handling of a crisis that has wiped 14 per cent off the company’s market value. The group has been repeatedly behind its own story. It was better that Brooks’ resignation arrived late rather than never, but it had less effect for coming after the Murdochs gave her their public backing. The Murdochs even flip-flopped over whether to appear before next week’s hearing at all.
In US congressional hearings, Rupert has come across reasonably well. But it’s hard to win in these situations when you are the subject of the inquiry and the opprobrium. Former BP boss Tony Hayward tried stonewalling in front of US lawmakers, a tactic that avoided self-incrimination but made him only more unpopular. Fred Goodwin, the former chief executive of Royal Bank of Scotland, hit back at UK parliamentarians but that didn't win him any friends. Goldman Sachs boss Lloyd Blankfein came across as over-rehearsed and over-lawyered.
The best tactic is to keep calm and avoid letting ego or excuses drown out a prevailing message of contrition. The Murdochs need to suppress their instincts and let themselves be seen to be kicked.
