21st Jul 11

 I am wondering why the UK Parliament, the Murdoch family and media commentators in Australia apparently fail to understand the basic governance concepts of accountability and responsibility. Were Messrs Rupert and James Murdoch responsible phone hacking - who knows? And who may ever know? Are they both accountable for it? You bet! Corporate Governance 101.

Community organisations, who have been badgered by government departments over the past decade on their governance arrangements, will not miss the irony. We live in an age where corporations are the most successful and dominant visible entities, the largest and most powerful even having the capacity to eclipse sovereign states both economically and in terms of influence. Yet even they do not always get it right.

We should not be surprised the governance model for corporations has infiltrated democratic governments and has subsequently been advanced by bureaucracy as the model for everyone, including community organisations. Disregard for a moment the bureaucratic predilection for "one size fits all" arrangements which ignore local contexts, size and the natural stages of organisational evolution. The governance model that has evolved in the corporate sphere has much to commend it as a vehicle for both enabling and balancing opportunity for executive initiative, creativity and risk taking with robust structures for reporting and accountability.

Most community organisations have recognised this and have responded accordingly. Community-based, community-managed organisations want to be accountable, both to their communities and to their funding bodies. However, the UK phone hacking scandal demonstrates good governance is not simply a matter of having recognised formal, governance structures in place. It also encompasses that more elusive beast “organisational culture” together with ethics and the personal aspects of leadership style. These have the capacity to overwhelm even the very best structural arrangements.

Through our governance projects LCSA has recognised community organisations, like businesses, undergo stages of development. In the early stages of a neighbourhood centre’s or community organisation’s life having a good start up entrepreneur as manager or co-ordinator is arguably more important than having a strong formal governance structure. However, good start up entrepreneurs often tend to be somewhat dictatorial and single minded in their approach, moving quickly, seizing opportunities, working all hours, exuding energy and drawing everyone along with them with a mixture of vision, excitement and force of personality.

As an organisation develops and grows it is vital for its long term health that it develops both accountability and delegation structures that relieve any individual from excessive power and decision making responsibilities. For, no matter how capable, competent and successful we may be, we are still only human beings and human beings all share the same limitations, whatever their culture or social background.

If an organisation leaves one person with too many decision making responsibilities it will limit its growth and grind to a halt as that person’s in-tray fills and overflows, so delegation is vital. Delegation does not seem to have been a problem for News Corporation.

The issue of excessive power is harder to define and address. It is inevitably a point where the elusiveness of organisational culture trumps formal structural arrangements. We are all aware of the opinion expressed by Lord Acton in his letter to Bishop Mandell Creighton in 1887: "Power tends to corrupt, and absolute power corrupts absolutely”. The corruption of power is not confined to the government of nations, it emerges in every institution and organisation.

Our problem is we live in an age which has been seduced by and worships the “leader as hero”. Even in Australia with our habitual cutting down of tall poppies, our elections have become more and more presidential in style and content, TV anchors leap on a plane to be the face of response to the latest disaster, and many radio show hosts abandon fair and balanced reporting for the role of populist agitator. And it works for them. The spirit of our age sweeps us along allowing the power hungry, the narcissistic and the status seekers to strut their stuff with impunity while the rest of us look on with a mixture of fascination, admiration, envy and (not frequently enough) horror. Most have never read Lord Acton’s next sentence: "Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men."

Mr Rupert Murdoch is the hero leader of News Corporation. As he swept all before him, his organisation, in terms of accountability, appeared happy to go along for the ride and major political parties of all persuasion chose to be seduced by his power rather than challenge it on behalf of the people who elected them. This may have been because they were afraid the people who elected them were already seduced by the power of his media.

When someone who is so powerful has such an obvious fall from grace the temptation for the rest of us who will never attain his success or dizzy heights of influence is to succumb to our envy through another ugly human trait, public or private gloating. It is at this point all of us who are involved in organisational life should pause and examine the practices and culture of our own organisations.

As I watched Mr Murdoch before the parliamentary committee, I saw not a bad man, but an extraordinarily ambitious and successful human being who became the hero leader with too much power.

I’m with Tina Turner, “We don’t need another hero”, for the seductions of power are always present. Even in community organisations, if we do not pay attention to both our culture and accountability structures we can all, in our own small way, travel the same destructive path.

Brian L Smith