Leadership & Culture Risk in Action: The Unraveling of The Ailes Empire at Fox News

If true, the New York Magazine cover story (http://nymag.com/daily/intelligencer/2016/09/how-fox-news-women-took-down-roger-ailes.html) and other media accounts we have seen in the past month offer a devastating account of not just leadership and culture risk gone wrong but of long term (20 years) and deep leadership and culture rot that, incredibly, went largely unaddressed except for back room settlements and terminations of those who reported wrongdoing. And all this because, as reported, the ultimate CEO and Chairman of the business, Rupert Murdoch, didn’t feel that he needed to get into the details of a business that grossed a good US$1 billion per year, give or take.

Some of the key issues that this fact pattern seems to involve include the following:
• Leaders set a tone — the rest of the organization responds accordingly
• Tone from the top affects tone in the middle and buzz at the bottom
• If inconsistent, employees will pay attention to what leaders do — not as much to what they say. If there is a disconnect, it’s the actions of leaders that will count over their words
• When it is clear that reporting a problem leads to retaliation in the form of unwarranted discipline, demotions, discrimination, termination, and worse, reporting will cease and an atmosphere of fear will pervade
• Accountability for leadership and culture begins and ends at the very top – with the CEO, the Chairman of the Board and then entire Board

I often talk about the types of leadership we encounter at work and developed the following typology of integrity leadership in my book The Reputation Risk Handbook: Surviving and Thriving in the Age of Hyper-Transparency (http://bit.ly/1284TMR) which is summarized in this graphic from the book and takes into account whether the leaders (be it the CEO and executive team and/or the board of directors) consider integrity and sustainability issues (i.e., ethics, compliance and corporate responsibility) as key parts of their portfolio as leaders:

While I am not in a position to make an informed judgment about what kind of leadership may have been involved in the Ailes/Fox News case, it’s unlikely to be at the top of this evolutionary chart – neither an “Enlightened” leadership nor a “Responsible” leadership seem to apply here. The “Superficial” or even “Irresponsible” form of leadership would seem to be the more likely case.

The contrary seems to be the case with Ailes’ prior employer — then GE-owned CNBC. As reported in the NY Magazine story, an interesting twist and perhaps good example of good leadership and culture risk management took place at CNBC where complaints of the kind made at Fox News were made, listened to, heeded and resolved (by terminating Ailes and not the victims of his wrongdoing).

It is cases like this one (and far less egregious one’s for that matter) that have led me to advocate that leadership and culture risk show up on every organizational risk register as absolutely critical strategic and reputational risks that the chief risk officer should include, the executive team and CEO should tackle head on and the board have an absolute responsibility to deal with regularly and proactively. Here’s a piece I wrote 2 years ago on this subject: http://bit.ly/1jB70Rv

We will see how the Ailes case unfolds but judging from the news reports that have been coming out fast and furious — as well as the proactive steps that Fox at long last seems to be taking apparently largely through the leadership of the two Murdoch sons – this case is likely to be one for the leadership and culture risk textbooks when all is said and done.

PS: As I write this column this news – about Ailes hiring the Hulk Hogan/Gawker lawyer to sue NY Magazine (http://www.ft.com/cms/s/0/61d2be5c-7382-11e6-bf48-b372cdb1043a.html#axzz4JPP01OCb) — just came across the transom. The battle has been joined and it’s not only about issues of leadership and culture risk but, in this case as with the Peter Thiel/Hulk Hogan/Gawker case, on the broader issue of freedom of the press. All I can say is that we live in interesting and very concerning times.
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