Monday, 13 August 2012

Rodial and the governance responsibilities of newspapers

Newspapers have special governance responsibilities. There has been much reported on corrupt practices of British newspapers in paying public officials for information that informs news stories and also on an apparently widespread historic practice of hacking into people's voicemail to gain information for reporting. It is worthwhile pointing out, in passing, that while those journalists implicated were acting improperly their motivation was, generally, to investigate news stories that were of public interest.

There is another area where the news media has responsibilities that has, so far, received less attention. I recently spotted a very peculiar article that illustrates this, in the Sunday Times (Kiki Loizou, "How I Made It: Maria, Hatzistefanis, founder of Rodial", 5 August 2012). You may argue that there is nothing wrong in a reputable newspaper running a piece on the background of the founder of a controversial business. It did, after all, state quite clearly that Rodial had sued a docter who cast doubts on the efficacy of their products and quoted the business founder as saying she had no regrets in having done so. However, let us examine this by taking a wholly hypothetical and extreme position. Let us suppose that none of Rodial's products have the effect their manufacturer claims and that it is a business that preys on the credulous and the desperate. Would it then be right for a reputable newspaper to be offering helpful publicity without calling it an advertisement?

You may argue that the article was balanced but I think that is questionable. At the time of the legal action  against the doctor it was claimed its purpose was to make it too expensive for her to defend herself when she thought she had merely expressed a reasonable opinion - the intention, it was suggested, was to shut her up. The doctor had expressed only mild doubts, not an all-out assertion that the claims for Rodial products were balderdash, and she had merely asked for the company to publish scientific proof for what seemed to be extraordinary claims. See my previous post on this matter. No peer reviewed evidence for efficacy has ever been published. Loizou's article does not make any of this clear and it is pretty material. You may wish to look at Rodial's website yourself to inform your own opinion of the products and claims for them. You may disagree with me. The range has extended considerably over the last couple of years and the products that caused all the fuss - under 'bodycare' - are now a small element of the whole. I admit that, personally, I find the claims for this range of products hard to believe without seeing some convincing supporting evidence. A counter-view to mine might be that many of the skincare products sold by Rodial make claims that are no more extravagant than many cosmetic companies, which also offer no proof of efficacy to potential customers. Indeed, for example, a study published in the past year suggested that only two or three of the many anti-wrinkle creams on the market work at all - all the rest have no effect.

My problem with the Sunday Times article is that it provides unbalanced publicity for this company. Are there other articles in supposed 'papers of record' that are similarly unbalanced? Do not newspapers that claim to be 'papers of record' owe some duty of care to their readers? Is this not a governance matter? How did the article come to be written, did Rodial's representatives approach the journalist, is the journalist a user of their products? I do not suggest that News International, the owner of the Sunday Times, is worse than other proprietors. It just happens that they have recently been the centre of a public relations and media storm concerning governance, which might have made them a bit more careful.

Lessons from the Olympics

I have been absent from the blogosphere for a while but am pleased to find I have some new things to say about corporate governance, even if they arise from unusual directions. Take the London 2012 Olympic Games...what does that have to do with business management or governance issues? The link is that good news drives out bad news.

The UK press has engaged in a bout of national self-congratulation at the close of the Olympic fortnight, and it is well justified. Most things worked very well indeed. The stadiums were ready on time, were comfortable and visually exciting; the Olympic Park was a fun place that handled feeding throngs of people perfectly well and the capital's transport system coped with the extra journeys without breaking sweat. Above all the people of this country were really engaged. Hundreds of thousands of people, if not millions, went to see the Olympic torch carried by a relay of 8,000 people through the country to finish, eventually, at the Olympic stadium. I was one of those spectators who, alerted that someone I know slightly had been chosen to run one of the legs as a reward for his voluntary community work, went out on to a street near where I live to watch. I met dozens of other people I know by sight. I waved a flag and cheered, took photos and was uplifted by the experience. In another flash of inspiration the Olympic venues used a team of 70,000 volunteer stewards who smiled and cracked jokes and good humouredly chivvied the crowds to where they needed to go. I also bought tickets to a couple of events as well as going to free events held in London parks, where giant tv screens carried broadcasts of the competition to enormous crowds.

So yes, it was a triumph. I notice, however, that failings and lessons that might be learnt for the future are being overwhelmed by the good news and conveniently forgotten. Some examples...the ticketing was a fiasco that, in this digital age, should have been avoidable. Security was well the the expedient of drafting in the army to help. Yet the problems that arose on the very eve of the games should have been predicatable months, if not years in advance. To make way for the expected throngs of visitors the authorities called on people to avoid London, which resulted in empty roads, empty shops and empty hotels. The experience of the Beijing Olympics four yours ago should have alerted everyone to the problem of empty seats at competitions, yet it was apparently a surprise all over again, and even if it is the fault of the Olympic organising committee it could still have been addressed well in advance. I could go on...but I will mention just one more thing, that general good sportsmanship was nearly, but not absolutely, universal. A member of one of Great Britain's medal winning cycling teams admitted on a tv interview having deliberately crashed his bike to get a restart. Instead of being disqualified (which should have happened), the matter was quietly forgotten. I also noticed that US swimming coaches implied drug use about a 15 year old Chinese competitor who clocked up a remarkable time to win a gold medal, yet were silent when a 15 year old American did the same thing...hmmm.

Going back to linkages...the same thing occurs in business. Failure and bad behaviour are forgotten if someone can associate themselves with a bigger triumph. Just today a book review in the newspaper brought to mind how individuals take credit also for triumphs that were not theirs: a new biography of the iconic  Israeli general Moshe Dayan explains that he initially argued against policies which he later claimed credit for, after they proved successful. The lesson for us all is that we must struggle to stop failure being forgotten because lessons will then not be learnt and mistakes will be repeated in future - perhaps with more serious consequences next time. Individuals who should be removed from office may also go on to perpetrate further 'crimes'. In practice how do we stop the well-connected from evading responsibility? It is hard and may call for individual courage on the part of whistle blowers or on the part of those who seek investigation of the failures or bad behaviour that has been buried. When everyone around only wants to talk about good news and to forget the bad news it can be emotionally hard to go against the crowd but it needs to be done. Are you an Olympic champion, will you stand up and do it?