Who is Responsible for Corporate Governance?

The fallout from the News of the World tabloid’s closing due to the phone-hacking scandal continues.

In recent testimony to a committee of Parliament in London, the stance taken by News Corporation owner Rupert Murdoch and his son, News Corp. deputy COO James Murdoch, was concise and consistent. To many questions asked by committee members, the Murdoch’s provided different versions of one primary answer: “We didn’t know.”

They claimed they didn’t know (among other things):

  • Who signed checks ranging up to 600,000 pounds for what one committee member characertized as “hush money.”
  • That the company was paying legal fees for the convicted felon who actually hacked into the voicemail of a 13-year-old murder victim.
  • That bribes were paid to police staff for information about news “targets.”
  • That phone-hacking was a wide-spread practice across their journalist population.

The single theme to the Murdoch’s testimony was that they didn’t know about any transgressions at News of the World until recently, and they are, therefore, not responsible for anything.

Committee member Tom Watson stated his belief that Rupert Murdoch “is responsible for corporate governance, and it’s revealing in itself what he doesn’t know.” The Murdoch’s lack of connection to day-to-day operational activities and norms created a News of the World culture that delivered exactly what they should expect it to: invasion of privacy, corruption, un-ethical practices, and, ultimately, the demise of the organization.

Who’s in Charge?

Who is responsible for corporate governance? The best case scenario puts this responsibility solely on the shoulders of the senior leader – be it the President, CEO, or whatever that person’s title. The senior leadership team shares in this responsibility but ultimate authority falls to the senior leader at the top of the organizational hierarchy.

The proactive senior leader and his/her senior leadership team put core agreements in place about “the way things will be done around here.” This compelling vision statement answers these questions:

  • Who are we (our organization’s purpose)?
  • Where are we going (picture of our desired future)?
  • What do we stand for (our values)?
  • What is our strategy (key success factors)?
  • What should we focus on right now (our goals)?

With these agreements in place, proactive senior leaders spend time and energy communicating the vision, values, strategy, and goals constantly. They spend time and energy wandering around the organization regularly, observing how the organization operates. Based on what they observe, they praise progress and citizenship, and redirect behaviors that are inconsistent to the desired vision.

In the absence of such agreements, with possibly only the “making of money” as the organization’s purpose, any number of approaches – legal or not – may serve that purpose.

Align Your Team

Even if you’re not the President or CEO, these suggestions can help you create clear agreements and desired outcomes for your team. Creating a compelling team vision is a terrific activity for engaging team members in the core work of the team. Clarity of vision, values, strategy, and goals enables team members to praise and coach each other during fast-paced, day-to-day activities.

The Buck Stops Here

US President Harry Truman had a sign on his desk in the Oval Office that said, “The Buck Stops Here.” What the world needs today, more than ever, are senior leaders that take this advice to heart. Set organizational standards, coach to them, hold staff accountable, and enjoy the benefits of a high performance, values-aligned workplace.

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