July 20, 2011 11:52 am ET - by
Bloomberg reported today that governance experts were not impressed with Murdoch's Parliament testimony yesterday, saying that by blaming his staff he wasn't doing enough to acknowledge his accountablility as CEO, and that this could ultimately lead to his resignation. From Bloomberg:
"If he didn't know what was going on, he's doing a lousy job as CEO and the board should replace him," said Jay Lorsch, a Harvard Business School professor. "The board should be asking, 'Where were you?' The buck stops with him."
"Based on the pattern we've seen in other major scandals, it's likely we'll see Murdoch resign," said Finkelstein, author of "Why Smart Executives Fail." "They all end up resigning."
Murdoch's testimony cast doubts about his leadership abilities and judgment, said Finkelstein, the Dartmouth professor.
Investors reacted positively to the testimony, which produced no new headlines that were immediately damaging to the company. News Corp. Class A shares rose 83 cents, or 5.5 percent, to $15.79 yesterday in Nasdaq Stock Market trading. In Australia, they climbed 5.1 percent to A$15.24 in Sydney today. [Bloomberg, 7/20/11]
Governance experts weren't the only ones concerned about Murdoch's performance. The U.K. Culture Secretary even weighed in, saying that it "worried a lot of people" that "so much wrongdoing seemed to happen without the knowledge of the people at the top."
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