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News of the World: Did Compliance Fail?

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News of the World: Did Compliance Fail?

As the News Corporation (News International) “phone hacking scandal” rolls on and escalates here in the UK, one question has now become a hotbed for discussion in business meetings and social gatherings around the country: How could this “hacking” have happened over such a length of time without the apparent knowledge or influence of senior executives in the group? Certainly seems impossible – doesn’t it?

I have done some research into the compliance programme of News Corps. Whilst they appear to have a detailed “Standards of Business Conduct” giving guidance on ethical behaviour, it would certainly appear that some individuals within the company were acting otherwise despite the policy. The company also has a 24/7/365 “Alertline,” which seems to be well publicised, for staff and third parties to call to report unethical behaviour – amongst other things. According to one press article I read today, the business has been hit by a class-action lawsuit by News Corps shareholders over claims that bosses failed to properly investigate phone hacking taking place at the News of the World newspaper, which was shut down on Sunday.

Could it be that the “Alertline” was indeed used but the incidents were not being effectively managed, escalated and reported to the group’s executives? Or perhaps they were being reported, but in a competitive market where business drivers overtook the need to behave in an ethical and compliant manner, executives turned a blind eye to what was happening around them? Whatever happened there certainly seems to have been a lack of control and compliance training and certainly emphasizes the need for organisations to take and manage Governance, Risk & Compliance issues very seriously.

One can only imagine where this whole saga is going. Some say it spells the demise of Rupert Murdoch and his multibillion dollar empire. One theory says it could even eventually bring down the British government, with its alleged close ties to the group and its executives. We must wait with baited breath to see what twists and turns unfold in the coming days and weeks.

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