Interestingly, Rupert Murdoch and Warren Buffett share a common background in newspapers.
Warren Buffett started his entrepreneurial endeavours as a young boy operating paper delivery routes, and in later life has become known for his ownership of the Buffalo News and as a board director of the Washington Post.
Rupert Murdoch, dubbed the “billionaire tyrant” in an episode of Fox-screened cartoon The Simpsons, is of course infamous as a hands-on publisher who knows more about what’s going on than his editors.
Rupert Murdoch is known to call his editors on a weekly basis and give them a grilling – which made his appearance at the select committee yesterday difficult to believe.
On the one hand, Rupert Murdoch – and even, at times, his son James – appeared genuinely sorry, but also very genuinely unaware of the issues and the allegations facing News Corporation and its subsidiaries.
Even with the opportunity of the last couple of weeks to do their research and be well briefed, there were issues which the Murdochs seemed to have no knowledge of at all.
They’re still paying some (or all) of convicted criminal Glenn Mulcaire’s legal bills, and Murdoch Snr had no knowledge at all of the “collective amnesia” of his News International staff, or of the actions of the News of the World’s chief reporter, Neville Thurlbeck, in receiving transcripts of intercepted phone calls.
The media, and the MPs in yesterday’s parliamentary select committee found it hard to believe that the Murdochs could be quite so trusting of their employees.
One BBC reporter quaintly referred to delegation of power and responsibility at the company which employs 53,000 people, as “devolution”. It seems that could in fact be an accurate description.
Should Rupert Murdoch be congratulated for being the trusting patriarch at the head of News Corporation, leaving talented and trusted employees to run each subsidiary as they see fit; or the person to blame for a culture of criminality and deliberately following a policy of willful blindness?
Warren Buffett: the “other” 80-year-old billionaire
Warren Buffett is the founder and CEO of Berkshire Hathaway, and has a reputation as a hands-off manager. This is despite him running a diverse conglomerate with annual revenues of $136bn – an amount over 4 times that of News Corporation.
In contrast to News Corp, Berkshire has a head office staff of just 16 people. Warren Buffett famously only does business with those that he “likes, trusts and admires”, and once he’s bought a company, he leaves the management team in place to do as they see fit.
So why does Buffett get away with such a light touch, when it appears to backfire so spectacularly for Mr Murdoch?
In 1991, during the Salomon Brothers scandal, when Buffett – as a minority shareholder – stepped in as chairman, sat in front of a committee of the US House of Representatives, he said:
“In the end, the spirit about compliance is as important, or more so, than words about compliance.
“I want the right words and I want the full range of internal controls. But I also have asked every Salomon employee to be his or her own compliance officer.
After they first obey all rules, I then want employees to ask themselves whether they are willing to have any contemplated act appear the next day on the front page of their local paper, to be read by their spouses, children and friends, with the reporting done by an informed and critical reporter.
“If they follow this test, they need not fear my other message to them: lose money for the firm and I will be understanding. Lose a shred of reputation for the firm and I will be ruthless.”
The best the Murdochs seemed to manage today is to issue a pamphlet with details of the company’s code of conduct to all employees.
This was one of the most telling details revealed today. If they really cared, the pamphlet would be just be the written backup of a policy and attitude which pervades the culture of the company.
Instead, the culture seemend to be one of ambition, greed, and success with exclusive stories and increasing circulation at any cost.
Perhaps Murdoch should play a round of golf with Buffett and take some tips from someone who understands that words are cheap – actions are everything.
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