US and UK PR chiefs say the scandal proves that communications should be at the “top of a CEO’s skillset”, as actions from the News Corp board in recent weeks have only served to further damage its corporate reputation and share price.
The verdict came as News Corp CEO Rupert Murdoch and European and Asia boss, son James appeared in front of MPs about their knowledge of alleged phone hacking at the News of the World.
Their appearance comes at the end a week that has seen the media company make several moves to demonstrate that they are handling the crisis, including accepting the resignations of senior executives, including chief executive former News International chief executive Rebekah Brooks.
In a Wall Street Journal interview last week, Murdoch said News Corp had handled the crisis “extremely well in every way possible”, without apologising.
When quizzed by MPs at the select committee hearing, however, he changed tack, declaring that “this is the most humble day of my career”. A statement released by News Corp during the hearing also apologised for the affair.
Francis Ingham, chief executive of the Public Relations Consultants Association in the UK, says that Rupert Murdoch’s actions of “self interest” in closing the News of the World and initially failing to apologise for his company’s handling of the crisis could leave him with no choice but to step down as News Corp’s CEO.
“Murdoch is now paying a hefty price for his arrogance indifference to protecting his company’s reputation. He shrugged off the circumstances and only thought of his financial model.”
In the US, federal investigations have been launched into accusations that News Corp journalists hacked the phones of 9/11 victims.
Rosanne Fiske, chair and CEO of the Public Relations Society of America, says the opening of such investigations is symbolic of the “severely diminished” credibility the company now has in the eyes of Americans.
“Even if News Corp comes out of this crisis with many more personnel or business losses, it will forever face a looming reputation and credibility challenge across the world.
Fiske adds: “Rupert Murdoch has survived many crises over his 40-plus years in media, whether he and News Corp can survive this latest one is now very much in question.”