Phone Hacking Scandal

Topics: Corporate governance, Corporation, Rupert Murdoch Pages: 2 (525 words) Published: March 16, 2014
3. Analyse the role of the Board in handling the phone-hacking scandal. Do you believe it was adequate? What should the Board have done to prevent an escalation of the scandal? Composition of members of the Board left much to be desired. The most important positions were occupied by Murdoch family members. In addition, a minority of the other members were people who had never dealt with the media industry. It could have huge impact on decreasing credibility of the Board during the investigation of the scandal. Considering the behavior of the Board, which is denying of any reports related to the phone hacking scandal at any time of the investigation, was not a good choice. It is well known that companies in the media industry based its success on public opinion. That’s why, when too much evidence such as testifying ex-reporters or emails, that indicated about guilt of corporation, the Board should take a different tactics. As for people from outside the case was already foregone (it had a huge impact on the future of the company) the Board should plead guilty and apologize to all the victims. It is possible that it would reduce the effects and prevent the escalation of the scandal. Unfortunately, the Board did it far too late.

4. Comment on the true independence of News Corp’s Board. Is it sufficient to just follow the guidelines in corporate governance codes? Should there be a deeper review of the threats to a director’s independence? Board independence is relatively new concept in corporate governance that calls for a majority of board members to be independent from the company. Independence occurs when a board member has not been and is not currently employed by the company or its auditor and the board member’s employer doesn’t do a significant amount of business with the company. Each company creates its own definition of significant. News Corp’s Board comprised of 16 directors, 8 of whom were classified as independent. The independent directors included...
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