Murdoch Will Prevail: News Corp Shareholder Meeting Offers 3 C-Suite Takeaways
By Billie G Blair, PhD, President and CEO, Change Strategists
All indications are that Rupert Murdoch will prevail at today’s annual shareholders’ meeting, that his and his directors’ tenure in their positions are secure and that the meeting will go off with very few ripples.
There will likely be the now-traditional shareholder actions to withhold votes for directors and some action about executive compensation. But for the most part, the meeting is expected to be relatively uneventful. For one thing, the Rupert Murdoch family owns 40 percent of the shares of the company, representing a solid voting block. Regarding “transgressions” of the recent past by one British newspaper in the conglomerate, the fact remains that only one facet of this very large corporation has stumbled. The experience has been costly, Murdoch and his family have apologized profusely, and they have closed out that publishing company.
This experience is little different from the misdirections of other large corporations—other than than the fact that it was played up a bit more for the public’s view because of who the company was/is. The GEs, the Wal-Marts, the McDonalds—all have their experiences with missteps and making amends. Even smaller corporations like Netflix and RIM have in recent weeks had their mea culpa experiences. In other words: All large corporations and particularly, all large, far-flung global conglomerates, daily make poor market decisions, live to regret them, but also live to function another day.
There are two elements that make this case distinctive, however. One is the fact that News Corp is the publisher of The Wall Street Journal and the owner of Fox News—both unpopular among the liberal left in the U.S. In addition, The Wall Street Journal continues as a highly successful newspaper and the Fox News organization as offering the U. S.’ most popular television news programs—both causes for enmity! And, thus a natural for making the company a high-profile media target when things go wrong.
The second element is the fact of Murdoch’s persistence in retaining the reigns of his far-flung empire. There is no age limit for occupying a high-level executive position, particularly when that is a position in one’s own corporation. However, agility concerns are usually the reason why most CEOs make a decision to step down and to hand over the reigns to a successor. This has not happened with Rupert Murdoch. Even though it became embarrassingly clear in recent weeks that Murdoch has most likely reached the point where the company that he founded would be better served if he were to occupy a supportive role rather than the predominant one. He made a passing acknowledgement of these difficulties at the height of the crisis, referring to the difficulty of keeping abreast of all those moving parts of his organization.
It is the second element that is most compelling at the present moment and that will likely be addressed in several ways—both subtle and overt—at the shareholders’ meeting. Rupert Murdoch had hoped that his son, James, would assume major responsibility for the empire. For a variety of reasons (the latest debacle being one of them), James appears to not be ready [or allowed] to step into that position of authority. However, COO Chase Carey inspires the confidence of investors and shareholders, is credited with the 14 percent rise in News Corp. shares over the past quarter, and is assuming ever-increasing authority at a central figure of the organization. Thus it is unlikely that shareholders will find serious fault with the company’s organization.
There are three takeaways for executives from this fascinating case study of chaotic events:
- The first is the reminder that, as CEO, one must remain ever-resourceful and ever-vigilant about the conduct of an organization, or in this case, an empire.
- The second is a reminder that “where there is smoke, there might well be fire.” The lesson that is ceaselessly taught by chaotic events is: Pay attention to the small things—those will be the ones that will come back to bite you. [James, for example, when told by subordinates of hacking concerns, waved the information away as a one-time instance.]
- And the third reminder is that no matter how carefully the organization is managed, there will always be instances when things go awry. When this happens, the appropriate reaction to the chaotic event is of supreme importance. In the Murdoch instance, the chaos was handled well: apologies and restitution were made; and the offending business organization was closed down permanently even though lucrative deals involved with this business arm were pending. Doing the right thing works every time.
Dr. Billie Blair is an organizational psychologist and President/CEO of the international management consulting firm, Change Strategists, Inc. She has acquired extensive leadership/management experience through positions held in corporate, government and university settings and is proud of the fact that she was mentored during doctoral work by Professor Peter Drucker. Dr. Blair is the author of two recent books on organizational change management: “All the Moving Parts: Organizational Change Management” and “Value Plus: Employees as Valuers.” She can be reached at: www.changestrategists.com.