Rupert Murdoch : Corporate Governance

News organizations that report on stories in a fair, balanced and ethical manner are essential to the functionality of this nation. A citizen’s ability to make well-informed decisions hinges on a news organization’s ability to relay the most accurate information regarding the state of the nation, the changing condition of communities, and adjustments in the government. Journalism is no longer a one-sided conversation. Journalism is an interactive process that allows for readers and viewers to create a dialogue with journalists by utilizing mediums such as social networking sites and comment sections. Audiences have a say in what stories get reported and how news stories are presented to the masses. When news organizations fail to cover all

In article 8, Michael Parenti challenges the view that the mainstream media in the United States is free, independent, neutral and objective. Parenti claims that the media “often behaves like the lapdogs of Plutocracy”. Plutocracy is a government that is basically controlled and ruled by the wealthy in that country. Essentially what this means is that the media is run by these giant wealthy corporations and instead of media doing its job, and informing the general public, instead it only says what these corporations want them to say. Hard hitting news that shines a negative light on these wealthy groups is banned because it makes them look bad. One of the best pieces of evidence he offers is the slew of reporters that have been fired or forced

He believes that the capitalist colonization of the digital world has led to this collapse of professional-quality journalism as a result of the further commercialization of journalism. In recent years, investigative journalism has been declining and media companies have shifted away from it and settled for repeating prepackaged messages. It is difficult for real journalism to exist when its revenue is based on advertisement. McChesney argues that journalism should be considers as public goods and that we should create non-commercial forms of journalism and non-profit media. One of the “darkest episodes of American journalism history” was the invasion of Iraq based on the U.S. administration’s claims that Iraq had weapons of mass destruction. These claims went unchallenged by the media because of the lack of investigative journalism, McChesney believes. Furthermore, he ends with bold proposals to reform journalism and the entire media. He proposes a strict regulation of advertising and limitations on ownership of broadcast media and expansion of nonprofit and publicly supported journalism. I agree with McChesney about the decline of quality journalism and I believe reforms to media must happen. However, I am uncertain how this would be possible with all the control these wealthy corporations, and their partners, have over the media. It will need a huge

People often question whether corporate boards matter because their day-today impact is difficult to observe. But, when things go wrong, they can become the center of attention. Certainly this was true of the Enron, Worldcom, and Parmalat scandals. The directors of Enron and Worldcom, in particular, were held liable for the fraud that occurred: Enron directors had to pay $168 million to investor plaintiffs, of which $13 million was out of pocket (not covered by insurance); and Worldcom directors had to pay $36 million, of which $18 million was out of pocket. As a consequence of these scandals and ongoing concerns about corporate governance, boards have been at the center of the policy

To the extent of prevention of corporate failure, I argue that three ASX principles and recommendations could halt the demise of Dick Smith. Firstly, the 2nd principle which is “Structure the board to add value” by structuring the board with a majority of independent directors would prevent CEO dominance because some suggest that independent outside directors can reduce the influence of dominant individuals (ASX, 2014, p. 17). In accordance with Gallagher and Bennie (2015, p. 20), the independent directors are likely to focus on the company’s objectives and not to make decision relying on others. Furthermore, an addressing of independent directors would reduce the reliance on management, and create the effectiveness on monitoring (Dechow et al. 1996 cited in Christensen, Kent, and Stewart (2010)), as well as capability to lessen the conflict of interest between managers and shareholders (Hardjo & Alireza, 2012, p. 4). Thus, DSE’s board would be more active to monitor the CEO’s performances because independent directors pay attentions to the interest of company (Gallagher & Bennie, 2015, p. 20) and shareholders (Hardjo & Alireza, 2012, p. 4)

After the Metromedia deal was made Murdoch purchased Davis's shares and News Corporation assumed complete control of 20th Century Fox. Initially Fox Television Station was a semi-autonomous unit in which News Corporation owned over 99 percent of the equity, but only 24 percent of the voting power. The balance was held personally by Murdoch. During this particular era the Federal Communications Commission regulations stated it prohibited foreign interests or non-American citizens from controlling more than 25 percent of an FCC licensed broadcast station. Though News Corporation was still based in Australia Murdoch became a naturalized U.S. citizen in 1985 and the transfer of majority voting to Murdoch was now sufficient” (http://www.en.wikipedia.org/wiki/Fox_Television_Stations). As of today, Rupert Murdoch is still the chairman and controlling shareholder of News Corporation and believes that all forms of media should not be free during this era of global media empires (http://topics.nytimes.com).

Kluyver, C. (2013). A primer on corporate governance (2nd ed.). New York, NY: Business Expert Press.

Although the presence of competition between the various media providers is good, America’s media industry is faced with a major concern of oligopoly. There are special interest groups that have a grip on the country’s media companies such as major television channels and broadcasting. Statistics show that a large part of what Americans view, hear, or read is controlled by a few corporations that own major television and radio stations, as well as newspapers (Bennett, 2004). For instance, there are six big corporations that dominate the American media industry. First, News Corp, which is owned by Rupert Murdoch, an Australian-born media tycoon, owns the wall Street Journal, DirecTV, and Fox Television, among others (London, 2015). Second, General electric owns Universal Vivendi and the National Broadcasting Corporation (London, 2015). Third, the Cable News Network is owned by Time

In a publication Objectivity & Balance: Today’s Best Practices in American Journalism by Joel Kaplan, the associate Dean for

Until the 1980s, the control of the media was in the hands of the national government. From then, the control shifted to private outlets and by the 1990’s, there were more than fifty multinational companies who controlled it (“Mass Media”). Today, only about six major companies control the larger fraction of media in America (Williams, Par. 1). Norman Solomon wrote in the New Political Science Journal that most reporters and editors work for just a few huge companies. These journalists and editors are on the payroll for “mega-media institutions”, of which, only about six exist (Solomon 297). How much will the public learn if these companies generally control the output of information?

This was a very interesting article, in my opinion it brings to mind the derived phrase, which came first the chicken or the egg. Meaning, is corporate governance an attempt to control the results of unethical practices of corporations or is it meant to deter them. In reading this article, it is clear that certain corporations practiced unethical business behaviors for self-interest, but the questions this author have are: 1. Should corporate governance be regulated by the legislature as well as the organization and to what degree, 2. Is corporate governance, there to protect the shareholder or the stakeholder, 3. How effective is corporate governance on a global level. The need for a governance system is based on the assumption that the separation between the owners of a company and its management provides self-interest executives the opportunity to take actions that benefit themselves, with the cost of these actions borne by the owners (Larcker & Tayan, 2008).

The first section of this essay focuses on the possible causes of corporate failures including dominant CEO, poor strategy decision and the failure of internal control. Secondly, it discusses how the third edition of corporate governance principles and recommendations could be applied to prevent the causes of the failure. The 1st, 2nd, and 7th principles along with specific recommendations will be mentioned in this section. However, the context is concerned solely with the causes stemming from Dick Smith itself.

The case study that was analyzed is, “Unauthorized Disclosure: Hewlett-Packard’s secret Surveillance of Directors and Journalists,” by Anne T. Lawrence, Randal D. Harris, and Sally Baack. The ethical issues presented through the case deal with Hewlett-Packard Company (HP). HP is a major international company in the computer and technology market. The company describes itself as a “technology solutions provider to consumers, business and institutions globally.” Their credo is called “HP way”, which focuses on points such as trust and respect for individuals, high level of achievement and contribution, business conduct with uncompromising integrity, objectives through teamwork, and encouragement of flexibility and innovation (Newman). The problems faced by HP’s board of directors were a lack of accountability with HP’s credo. If the “HP way” was followed by them, these ethical issues would be avoided. It also promotes a bad example by the high-level of management of this globally powerful organization.

As the turn of the 21st Century evolved, it appeared as if Adelphia Communications Corporation was on a direct path of success; unbeknownst to their investors and the public, they were in reality on a direct path of destruction instead. Unfortunately, Adelphia is not the first major company in the history of the United States’ business world to lose the trust of the American public, but it is certainly one of the most notable ones to do so. As the events surrounding the Adelphia scandal unfolded in full view of the public eye, a multitude of media outlets were there to broadcast the destruction and distrust to the masses leaving many wondering if the term “business ethics” was actually nothing more than just an oxymoron. Throughout this

Here we see a failure of the board to look at management critically. They accepted only the information presented to them by the CEO and did not demand a better picture on the state of RBS’s business in mortgage trading even while the CEO’s story seemed to constantly be changing. The board exists as a watchdog to the executive management yet nothing was done to hold the CEO accountable to the truth.