If there’s one criticism of Rupert Murdoch that stands out above all others, it’s his failure to set an ultimate standard of behaviour for those around him, whether they be directors, editors, spindoctors, journalists, lobbyists, executives or relatives.
The Sun King’s next biggest failing is the cultural expectation within News Corp that any breaches of acceptable behaviour by those within the broader Murdoch empire will not be highlighted editorially. Indeed, it is completely unacceptable to publically call for high standards or accountability from those who are loyal to Rupert and afforded his protection.
The ultimate example of this is the complete lack of any accountability within News Corp for the enormous media and political support it threw into the Iraq invasion. All political leaders who pursued this disaster are gone, yet Rupert soldiers on as if nothing happened.
Today we have seen another classic example of both these Murdoch failings through the coverage of the James Hardie decision.
This was a huge story for corporate Australia which spans everything from social justice to industrial relations, political regulation and corporate governance.
Never before has a major Australian company attempted such a deceitful dodge of its liabilities and never before has the corporate plod successfully sued an entire blue-chip board.
While James Hardie has signalled today that it might appeal and we haven’t yet got the details of what penalties will be imposed on the 10 directors, the ASIC victory entirely revolves around this press release that was sent out by then James Hardie spindoctor Greg Baxter on February 16, 2001, one day after what is now a fateful board meeting for the directors involved.
The press release and its claims the then $293 million Medical Research and Compensation Foundation was “fully-funded” will go down as one of the most notorious pieces of deceitful spin in Australian history. Ten directors are about to be banned and fined and the likes of Telstra and AMP will probably need to find replacements for the likes of Meredith Hellicar and Peter Willcox.
It was Greg Baxter who brought the release to the February 15 board meeting and as The SMH’s Michael Evans points out today, he had this exchange with one of the barristers for the directors during the trial:
SILK: It wasn’t read out, was it?
BAXTER: It was read, I believe.
SILK: I want to suggest to you that that’s just simply wrong: do you agree with that?
SILK: Who read it?
BAXTER: It was read by … It was read … Those people read something.
SILK: So, in other words, I just want to be clear on this, it wasn’t read out loud, was it?
For the past six years Greg Baxter has been Rupert Murdoch’s mouth-piece in Australia and you can’t help feeling that his employment influences how News Ltd has covered this story.
Whilst The AFR, The Age and The SMH all ran the story on page one and produced multiple angles, the Herald Sun, Australia’s biggest selling paper, could only manage one story starting on page 41.
The Australian’s top business commentator John Durie did manage to mention Greg Baxter in today’s column which was headlined “Humble release crashes Telstra careers” and included the following:
Ironically enough, none of those present at the relevant meeting in 2001 could remember whether the press release was formally approved or circulated at the meeting.
Justice Gzell effectively said he didn’t accept the non-executive directors’ evidence on the issue and relied in part on an email that then company public relations boss Greg Baxter sent to an outside consultant.
Never before has collective memory loss, such an email and such a press release played such a crucial role in once-stellar corporate careers.
And yet the one career it doesn’t seem to have affected is the spindoctor whose name appeared at the bottom of the press release.
While there are elements of the judgment that do mitigate the criticisms of Baxter, in my opinion he is a completely inappropriate person to be Rupert Murdoch’s Australian spokesman.