Friday, July 22, 2011

Corporate failure: more than a few bad apples

With all the current discussion about News International and its parent company News Corp, many pixels are being devoted to a discussion of just how things went so wrong. After a string of recent revelations, the claim, maintained by News executives for years, that it was one (or then a few) bad apple(s) in an otherwise honest company now appears as either deluded, deceitful or the result of seriously deficient oversight. Since it is nearly always better to assume incompetence rather than conspiracy, at best Tuesday's parliamentary inquiry revealed a string of failed leaders - spanning media editors, senior corporate executives, police and politicians - who remained dangerously out of touch with what was going on around them. At worst, collusion, corruption and cover up on an industrial scale dwarf the significance of the original criminal data acquisition. Whatever the true nature of the rot, it goes beyond a couple of apples, whether at the top or bottom of the pile.

When confronted with misdeeds on this scale, a common reaction (which I notice in my own instincts) is to seek to put a face on the problem, a single individual who can be held ultimately responsible. We want the buck to stop somewhere. The legal pursuit of the questions of who knew what when is important and such investigations are likely to take some time. In the meantime, an impatient public desires visible signs of justice. If we cannot get convictions just yet, we will settle for resignations.

We so desperately want to be able to find someone to blame, some focus for our fury at the damage caused by a system of corruption in which media, police and politicians were too close and saw their own good in terms of a small circle than the national interest they claimed to be representing. We want to know that our violated trust is being taken seriously. Resignations serve as symbolic steps in this direction; they speak to a collective desire to start again and are a metaphor of what it looks like for an organisation to repent.

But there are deeper questions at stake. Individuals did indeed commit crimes and moral failures (either of commission or omission). Many participated in looking the other way, being willfully blind to what was going on because it was more convenient to maintain deniability (or perhaps they continue to mislead political authorities). But to leave the analysis at the level of individuals fails to take account of the dynamics that can exist at a supra-individual level. The whole can often be greater than the sum of the parts. If the only lessons we take away from this saga involve the need for greater personal integrity, we miss the opportunity to ask how the very structures might have served to sideline, subvert or dilute integrity.

There are individual failures, but also failures of structure, failures of collective imagination. They are failures of systems that are based on seeking the wrong kinds of inclusion, systems that punish those who speak up while rewarding those who conform without questioning the quality of what is shared. Whether a for-profit corporation can simulatenously claim to be serving its shareholders and the common good is an interesting question, as is whether a political system in which an MP is required to win more votes than any other candidate every five years encourages a myopic and image-driven politics.

When a corporation is accountable to its shareholders' interests and those interests are understood in narrow financial terms (as they usually are), then the only place that ethical considerations enter into it is the impulse to avoid anything unethical insofar as it hurts the bottom line. Therefore, the recent fall in News Corp shares is the real crime Rupert and his various officers have committed.

But of course that way madness lies, and the reaction of the public to this scandal is partly media-driven hysteria (the very same hysteria that News have used to successfully to drive sales) and partly genuine moral outrage that speaks to a standard other than the bottom line. There is more to living well than making a profit and there is more to a flourishing nation (or world) than a growing GDP. Therefore, there must be more to a healthy company than a rising share price. Let us resist the colonisation of our ethical thought by cost-benefit risk analysis that seeks to put a price on everything. The language of money cannot adequately translate the full complexity and richness of our moral existence and to rely on it to do so is to abdicate our responsibility for pursuing good and shunning evil.

Amidst the repeated failure of not just scattered individuals but of our most trusted social institutions - of corporations and parliaments, banks and police, sensationalist newspapers and a reading public that buys them - it may be worth considering again the apostle Paul's exhortation to his readers in Rome, who were at the heart of a vast empire with powerful cultural incentives to fit in: Do not be conformed to this world, but be transformed by the renewing of your minds (Romans 12.2 NRSV). This is addressed not simply to the individual believers, but to the church as a whole. It is an invitation to a way of corporate existence based on the good news of God's mercies (verse 1). The church, of course, is not immune from moral failure. Yet the good news here is an invitation to discover anew a source of belonging that does not require us to narrow our moral vision lest we stick out, but which gives us permission to find fresh ways of thinking and seeing amidst a culture that has lost its way. The church has no monopoly on wisdom, has not cornered the market in corporate governance or collective integrity. Yet in its practices of humility, confession, forgiveness and love of neighbour to the glory of God, in its memory of Jesus accepting the outcast and breaking bread with the traitor, in its grasp of the promise of a Spirit who leads into both honesty and new begingings, it has something that is genuinely different and worth rediscovering and sharing by each generation.


byron smith said...

SMH: Corporate goliaths in Australia. This may appear on the surface to have little to with News Corp, but the common thread is the distorting political effect of massive companies with large amounts of market share.

byron smith said...

The Conversation: Confessions of a "recovering" former Murdoch news chief.

byron smith said...

A few bad apples - why Fox doesn't do phone-hacking.

byron smith said...

Hot Topic: Lessons from the Murdoch saga. One of the lessons concerns the dangers of having any field dominated by a small number of big players, which is precisely the kind of systemic issue hidden by a smattering of resignations that I'm talking about.

byron smith said...

Tim Dickinson: Roger Ailes and the rise of Fox News. Some amazing stories and quotes here.

"Ailes [..] has built the most formidable propaganda machine ever seen outside of the Communist bloc, pioneering a business model that effectively monetises conservative politics through its relentless focus on the bottom line. "I'm not in politics," Ailes recently boasted. "I'm in ratings. We're winning."

"The only thing that remains to be seen is whether Ailes can have it both ways: reaching his goal of $1bn in annual profits while simultaneously dethroning Obama with one of his candidate-employees. Either way, he has put the Republican party on his payroll and forced it to remake itself around his image. Ailes is the Chairman, and the conservative movement now reports to him. "Republicans originally thought that Fox worked for us," said David Frum, the former Bush speechwriter. "Now we're discovering that we work for Fox.""

byron smith said...

Did you know that Zondervan is part of News Corp? I think I did know that, at some stage, but hadn't remembered it until reading this piece from Halden.

Donna said...

Yes, I did know that Zondervan is part of News Corp. The one useful thing that my 6 months in an economics degree taught me (that and the fact that economics is not for me.)

Do you think the riots have anything to do with the News International thing?

byron smith said...

Not in any direct way, though there are some cultural parallels about the loss of inhibitions in the pursuit of personal gain.

byron smith said...

Guardian: Corporate sins, by new Archbishop of Canterbury, Justin Welby. I love it. This is so important and I love the fact that he's serious about consequences that go beyond tiny fines for serious corporate criminal behaviour.

byron smith said...

Guardian: Corporate access to UK government. A buddy system - what is this: kindergarten?