In today’s highly competitive environment, news media strive to outperform each other in delivering high-quality content to their viewers. Corporate governance business ethics serves as the framework for their decision-making and both internal and external relations. By applying ethical principles, organizations provide a return for the hard work of their employees, shareholders, customers, et cetera. However, workplace misconduct and the failure to follow business ethics lead to scandals and punitive measures. This paper aims to explore the case of Bill O’Reilly, who was alleged in sexual harassment, which made the 21st Fox Century company break the contract with this prominent journalist.
Defining Corporate Governance
The 21st Century Fox is the US-based international mass media corporation that focuses on TV and online news. Up to 2015, Rupert Murdoch was the chief executive officer (CEO) and chairman of the company, but his son, James, replaced him recently. Currently, 21st Century Fox’s assets largely belong to Disney, as many stakeholders agreed in 2017. According to the official report, Fox News media networks accounted for $84 million, and another $82 billion was gained by Fox Business in 2019 (Annual report 2019). Among the key strengths of the corporation, there are premium brands resonating with viewers’ attitudes and effective leadership. The company aims to maintain a leading position in news media, increase revenue through high-quality products, and focus on expanding online.
The presenter has repeatedly been charged with sexual harassment, as a result of which more than 50 channel sponsors refused to provide advertising for his Fact O’Reilly program. After a thorough and careful review of the situation, the company and Bill O’Reilly agreed that Bill O’Reilly would not return to the Fox News channel. The company’s statement also noted that the decision to remove the presenter was made at an emergency meeting of the 21st Century Fox board of directors after the consultation with lawyers (Steel and Schmidt, 2017). It should be stressed that the official reasons for dismissal were not disclosed. According to The New York Times, the dismissal occurred amid an outflow of dozens of advertisers from the channel after publishing an article about O’Reilly’s harassment of five women. Later, they were paid a total of $ 13 million for silence about the behavior of the journalist. O’Reilly was laid off nine months after his former boss, Fox News CEO, Roger Ayles, also lost his job due to allegations of sexual harassment.
Considering this situation in terms of corporate governance, it becomes clear that the company has some difficulties with conforming to its official statements. As it is declared by 21st Century Fox, corporate governance is a robust practice of creating and maintaining strong ethical culture in the interests of stakeholders. It implies independent board oversight, a code of conduct, and corporate governance policies. According to the workplace inclusion and civility point, which is expected to research and decide on the cases of wrongdoing. As for the situation with O’Reilly, the reporting on his harassment was not properly responded to by the company’s authorities. Before the scandal in 2017, several colleagues of this media employee also accused him of harassment, and the company had to pay multi-million dollar compensation so that women would not go to court. One of the non-governmental organizations in the US analyzed the actions the journalist over the past 20 years (Garber, 2017). It was noteworthy to find that any non-White guest of his program received insults with regards to his or her cultural background.
O’Reilly denied all charges against him, and21st Century Fox also did not accept the case of misconduct. To understand the scale of the scandal and not be limited to the on-duty phrase fired for sexual harassment, The Atlantic collected women’s stories about O’Reilly’s behavior at work. It is reported that the eccentric presenter came up many times to one African-American employee, languidly calling her “hot chocolate” (Garber, 2017). He also invited everyone to have sex and called one of the producers of the show to share secret fantasies. The journalist did not hesitate to suggest colleagues buy a vibrator and have sex with him on the phone or listen to stories about his fictitious adventures with masseuses, flight attendants, and actresses. If a woman refused to answer his harassment or listen to dirty stories, O’Reilly lost his temper and promised the victims that if they complain, they will pay so dearly that they regret that they were born.
Examining Normative and Descriptive Business Ethics Theories
In the practice of global business, it is becoming increasingly important to follow ethical standards as a set of rules of behavior. Indeed, in everyday business life, situations often arise that require a clear ethical assessment. Currently, there is a need for an increasing number of people, which happens for at least two reasons. In particular, the scale of the business is constantly growing, and the consequences of unethical business behavior are becoming more destructive (Bowie, 2017). All the participants of corporate governance, accordingly, face various ethical issues, but business exists in a competitive environment. Competition forms a number of problems, the solution of which is fraught with ethical issues. The unfriendly takeover of enterprises, withdrawal of assets from companies contrary to the interests of the owner, use of administrative resources to solve financial problems – all these problems are ethical in
the normative business ethics theories imply a set of rules and regulations that are regarded as a norm for a certain society. In business, it can be understood as the guidance of principles that determine the appropriateness of employee conduct in the workplace. For example, a social contract theory is an informal agreement regarding behavioral norms that arose on the basis of common goals, beliefs, and attitudes of groups of people or communities. The theory divides the three levels of moral standards that govern the activities of economic entities: hyper norms, macro-social contracts, and micro-social contracts. When universal hyper norms conflict with community norms, the former must take precedence (Jahn and Brühl, 2018). Accordingly, O’Reilly’s behavior was opposite to the one that was expected by people living in a diverse world. Thus, the theory of social contracts provides tremendous moral flexibility while guaranteeing certain moral requirements. One may conclude that the ethical and philosophical basis of the theory of social contracts is utilitarianism and relativism.
The given scandal demonstrates the importance of social responsibility and business ethics. The social responsibility of corporate governance is determined by the importance of this institution for the life of people and civilization as a whole (Bowie, 2017). Business is an important social institution, due to which certain social structures and order in society are supported. The identified journalist broke the rules that were accepted in society regarding equal treatment of all the people despite their racial and gender differences. And this primarily determines his social responsibility in society. Being a powerful force, the media can lead to the creation of a new situation in society. At the same time, one should not forget that business development can lead to the destruction of existing social values, habitual details of the environment, and aggravation of social inequality of people (Jahn and Brühl, 2018). Therefore, the consequences of O’Reilly’s actions as a part of news media can be comparable with the impact of all other social institutions.
The theory of stakeholders is another relevant theory that calls for protecting the interests of all social groups with which the organization’s activities are connected. The classic point of view of a business is that corporations have obligations to their shareholders, which is also correct for 21st Century Fox. However, the stakeholder approach considers the corporation as part of the social structure of society, to which it is also responsible. The stakeholders include shareholders, workers and employees, consumers, suppliers, government organizations, the local community, trade unions, social movements, and competitors (Bowie, 2017). In the given company’s business ethics, the concept of stakeholders is used as a coordinate system for analysis. The system of moral standards (specification of universal norms) and the degree of compliance with moral standards in relation to each group of interested parties are studied. It is found that even though the company did not accept the allegations, it paid to those who reported about sexual harassment cases and ceased partnership with the accused person. Such an approach to resolving this scandal shows that the corporation acts in terms of the theory of stakeholders, paying attention to all of them.
As descriptive business ethics, 21st Century Fox adopts several general value principles. It strives to build relationships with customers and partners based on legal, moral, and ethical standards and takes full responsibility to customers for the quality of their products and timely fulfillment of contractual obligations. In the context of collective principles of behavior, all employees are expected to ensure the following principles in the process of labor activity, demonstrating concern for the common interests of the company and every employee individually. The promotion of the growth of corporate values, corporate culture, and the spirit of cohesion in the team is encouraged by leadership. At the same time, the creation and maintenance of an excellent business image, impeccable reputation, and compliance with business communication standards are among the key priorities. Ethical principles of workplace relations include the requirements that every person should respect all people around him or her and value their personality, being polite and correct in any situation. Since O’Reilly did not meet these principles, the decision of the company can be justified.
Analyzing Stakeholder Perspectives
The stakeholder perspective clarifies that business decisions should be ethical in a long-term period. This promotes increased attention to sustainability and corporate image as the key positive consequences (Bowie, 2017). Since the beginning of the described scandal, more than 50 companies have refused to show ads during the broadcast of Factor O’Reilleven thoughhat in 2016 the show brought the channel $ 147.13 million in advertising revenue (Garber, 2017). As a result, the scandal reached the Murdoch family, which owns the media holding, and unwittingly had to pay attention to sexual scandals involving channel employees. In other words, the stakeholder perspective seems to be not employed in the corporation.
The most curious issue is that O’Reilly was not alone in his behavior, and Fox Century seems to have problems with the behavior of male employees. In 2016, the executive director, chairman of the board of Fox News, 75-year-old Roger Ayles, also harassing women, left his post with scandal. The well-known journalist, Gretchen Carlson, according to rumors, was suspended from work because she refused to have sex with him. The host interviewed Condoleezza Rice, Tony Blair, Barack Obama, and Hillary Clinton, but they turned a blind eye to her professional achievements. After such a scandal, the channel’s leadership began to remind men that it is not appropriate to touch women at every opportunity. Male employees were gathered for special meetings to be explained in detail what sexual harassment is, and then showed a video, in which Donald Trump talks about his adventures in 2005 and utters a viral phrase about grabbing women for places that one should not touch at least during working hours.
To conclude, this paper discussed the concepts of corporate governance and business ethics on the example of the scandal with O’Reilly and the 21st Fox Century in 2017. It was revealed that the identified journalist was repeatedly alleged in sexual harassment and racial discrimination, while the company was aware of it while signing the last contract with him. The critical analysis of the case from the perspective of the social theory and stakeholder theories allowed stating that the corporation needs to reconsiit’s its business ethics implementation principles to prevent similar cases in the future.
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