When Rupert and James Murdoch walked in to face more than two hours of questions from a group of British politicians last month, it turned into an unprecedented grilling which unearthed significant information and context on the News of the World phone hacking scandal.
The whole exercise demonstrated the benefit of unscripted, open-ended, independent public questioning of powerful figures. It was a fine example of democracy in action.
The same can't be said for this morning's conference call with analysts and journalists to discuss the better-than-expected $US2.74 billion net profit which News Corp revealed for the 2010-11 financial year.
The financial analysts are a supine bunch. They trade on their access to management and an ability to crunch the numbers, advising clients whether to buy or sell News Corp. Governance, accountability and transparency doesn't easily translate into numbers on a spreadsheet.
News Corp promotes the names and telephone numbers of 28 analysts which follow the company on its website.
I emailed them all yesterday with a list of suggested questions and arguments, but none of them managed to rise to the challenge of raising any challenging issues during 31 minutes of questioning this morning. Have a listen to how their 12 questions unfolded.
Maybe this is because most analysts are employed by global investment banks such as Deutsche Bank, Credit Suisse and Goldman Sachs, which have collectively pocketed hundreds of millions of dollars of fees from News Corp over the years. The conflicts of interest are many and varied, which explains why it is a rare analyst who asks Rupert Murdoch a pointed question on a conference call.
The journalists on the quarterly News Corp conference calls are normally treated as second-class citizens, given a brief window to ask questions once the analysts are done.
Representatives from Reuters, the Financial Times, the Hollywood Reporter and National Public Radio quickly cut to the chase this morning on the myriad of legal and governance issues besetting the company.
Unsurprisingly, the call was shut down after six questions from six journalists over six minutes as the 80-year-old News Corp founder struggled to answer questions about whether he still wanted James Murdoch to succeed him, how US regulatory probes were going and whether he would refresh the board with new independent directors.
While the Murdoch management team clearly had a strategy to allow chief operating officer Chase Carey do much of the talking on the business, it was striking that Rupert Murdoch was doing all the talking on behalf of the directors that are supposed to represent non-Murdoch shareholders.
It was Rupert who declared during his three-minute opening address that the board supports him remaining as the world's longest-serving CEO of a public company and Rupert who declared that Chase Carey supports James Murdoch staying in his current role.
Despite meeting over two days this week in Los Angeles this week, no independent director fronted today's call to give a board perspective on behalf of the 87 per cent of News Corp which is owned by non-Murdoch investors.
Melbourne-based Sir Rod Eddington, who is supposed to be the lead independent director and chairman of the board audit and risk committee, hasn't said boo publicly since the hacking scandal exploded on July 4.
When challenged about the board not being independent, Rupert cut one journalist off to declare that lawyer and Georgetown University professor Viet Dinh is completely independent.
The conference call was then shut down before the obvious follow up question: "how can Viet Dinh be the independent chair of the governance committee when he is godfather to one of Lachlan Murdoch's sons?"...read more