What are we going to do about media regulation?
This week saw release of the 81 page report of the Convergence Review, an Australian Government document that deals with broadcast regulation and offers a litany of recommendations. Most of the recommendations are likely to be disregarded by both the ALP and the Coalition, consigned to the “Yes Minister” basket (“nice idea but politically impractical and administratively inconvenient”) that has been the final resting place of a succession of reviews since the 1950s.
The same week saw release of the report by the UK parliament’s Culture Media and Sport Select Committee into News International and phone-hacking. That document will presumably to be denounced by News publications as egregiously partisan or – more persuasively – as ignorant of the realities of managing a global corporation in a difficult environment. However, it offers a damning assessment of corporate governance in one of Australia’s dominant media conglomerates.
The report asks whether Rupert Murdoch “turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications”. It condemns “the lack of effective corporate governance at News Corporation and News International”, criticising several News senior executives rather than singling out Mr Murdoch.
It concludes that Murdoch “is not a fit person to exercise the stewardship of a major international company". Murdoch may well respond to that criticism by taking a well-earned early retirement (at 81 it’s surely time to relax and engage in good works like his mother). Some family members will presumably relinquish positions, being replaced by siblings or proxies.
Irrespective of what happens with the Murdoch clan and restive private equity, the two reports pose questions for corporate governance in the Australian media industry, the same governance that was highlighted by the recent Finkelstein Review that was so passionately denounced by News journalists. Do we require board members and senior executives to be “fit and proper persons”, individuals who are socially responsible and vigilant in self-policing of corporate misbehaviour? Can we leave regulation to those whose behaviour indicates that they need to be regulated?
Murdoch’s “blind eye” or managerial overcommitment – too many media outlets, too little time – is unsurprising rather than an aberration. Lord Beaverbrook engaged in insider trading. Robert Maxwell silenced critics with defamation action while looting the corporate pension fund after the UK Government ignored a finding that he was indeed not a “fit and proper person”. In Australia the history of colourful media entrepreneurs whose probity was elastic includes Ezra Norton, Alan Bond, Christopher Skase, Conrad Black and Kerry Packer.
The Finkelstein Review suggested that we need to look hard – and make some tough decisions – at the balance between media self-regulation and public oversight. Given the media’s preoccupation with the Slipper Affair it is unlikely that the Government will make those decisions.
The same theme is also apparent in the Convergence Review report, a more political document. Its 31 recommendations emphasise self-regulation (with certification by a replacement for the Australian Communications and Media Authority (ACMA), in essence an exercise in rebadging and bigger budgets rather than structural change). The recommendations also embrace the promotion of “fairness, accuracy and transparency” and tweaking of media ownership rules.
No Commonwealth bureaucrat ever got fired for chanting mantras about fairness, accuracy, transparency or motherhood. The promotion of those values will of course by undertaken by “the usual suspects”, people beholden to private equity and bankers rather than a wider range of stakeholders.
From a governance perspective corporate misbehaviour and timely meaningful responses appear to be located on different planets, rather than merely on different continents, and the report is essentially a recipe for “the more things change, the more they stay the same”.
That assumption of Australian exceptionalism – that corporate misbehaviour is somehow restricted to Tokyo, London and New York rather than filtering down to local executive suites and board rooms – is naïve and regrettable. It’s abetted by a generation of MBA factories that have turned a Murdochian blind eye to notions of corporate social responsibility and best practice corporate governance, evident in for example the ingenuity of James Hardie in offshoring its assets while leaving asbestos victims behind. Works such as Nick Herd’s Networking: Commercial Television in Australia suggest that in debates about media policy, money has always talked louder than words about values and that a succession of reports have been ignored by Governments or disregarded by regulatory bodies.
It’s time for academia to look beyond the pieties of the Convergence Review and ask hard questions that can be embraced by voters rather than timid politicians.