Posted on 09/18/2004 1:15:51 AM PDT by Cincinatus' Wife
HOW SHOULD a business respond to a highly compensated employee in a position of great responsibility engaging in seemingly irrational behavior that is causing great harm to the firm and its brands? And what if the company is in the news business, where reputation is everything?
Of course, it depends on the circumstances, but one thing is certain: Doing nothing is not an option. Viacom, the parent of CBS-TV, cannot now do nothing about the deepening controversy over the use of apparently forged documents on "60 Minutes" and its evening news anchored by Dan Rather.
If Rather and CBS News President Andrew Heyward had simply acknowledged a possible problem and announced they would look into it, the Viacom board would be off the hook. It would be an embarrassing episode for CBS, but it would have been a three- or four-day story.
But Rather and company have dug in, moving from one implausibility to another, each day facing intensified hoots of derision, playing what is most certainly a losing hand. As Mark Twain once said, "Against the assault of laughter nothing can stand."
Over the years, Rather has accrued great power at CBS. He is not only anchor of the evening news, but also its managing editor. He doesn't just read the news. He also decides what is news. And now, instead of reporting the news, he has become the news - and it looks like he is in way too deep.
CBS's management has allowed Rather great influence in formulating the news, but with such power comes responsibility. When that responsibility is abused in such a dramatic fashion, the accountability flows ultimately to the board.
Viacom is chaired by movie-theater magnate Sumner Redstone. The board includes not only his daughter and moneyed cronies of varying degree, but also independent directors like Bill Cohen, the former senator and defense secretary, and Patty Stonesifer, president of the Bill and Melinda Gates Foundation.
Serving on a board like Viacom is no doubt a cushy deal and a positively thrilling opportunity. But every so often, publicly held companies get in big trouble and directors have to function like directors. This is one of those times.
Dan Rather joined CBS News in 1962. He is a bit of an institution. The prominence of CBS News preceded by decades Viacom's acquisition of the company in 1999. Under normal circumstances, reluctance by Viacom to tamper with CBS News would be understandable.
Add to that the fear that it would be accused of breaching the news division's independence if it exercised more oversight. But it may be that very independence that the Viacom board must now rescue. Rather and Heyward appear to be acting irrationally, but they are not stupid men. It is rational to exercise the better of two bad options.
Perhaps having their credibility pummeled is preferable to disclosing where the documents came from. If CBS knowingly received them from the Kerry campaign or the Democratic National Committee, it would be a huge journalistic scandal, not to mention a serious blow to John Kerry's candidacy.
The corporate scandals of recent years have created an expectation of financial accountability and transparency. Viacom faces this expectation, but also another one just as powerful. With or without the memo controversy, there is an increased expectation in the news business of editorial accountability and transparency. The Internet has democratized information. Pajama-clad bloggers can check facts as easily as Dan Rather's staff.
CBS News and "60 Minutes" are valuable brands. Over the years, "60 Minutes" has been a cash cow for the network. Those brands now face irreparable harm. The Viacom board has a fiduciary duty to protect the interests of shareholders by getting to the bottom of how CBS came to use the fakes, and where they came from.
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Peter Flaherty is president of the National Legal and Policy Center, a foundation promoting ethics in public life.
Anybody know who holds large percentages of related CBS/Viacom stock? Who are the movers and shakers?
Excellent article. Rather and CBS had better do something. I'm not one for conspiracies, but I think they've got a LOT to hide, which explains their stonewalling.
Their reputation already sucked so probably doesn't make much difference anyway. They're in the downward death spiral and probably aren't coming out of it alive. It's the end of CBS as we know it. Thank you Dan Rather. And the really great thing is, you're taking Kerry and the Democrats down with you. God works in mysterious ways.
Excellent post. I posted the following question on another thread that is more appropriately asked here. Isn't Viacom actually breaking some kind of federal law if they do nothing? And can't the board of directors be held (criminally?) responsible? Let's say that Dan Rather knowingly conspired to use the forged documents that he knew came from the Democratic Party, using the power of CBS as a news organization to hurt the Republicans in a presidential election. There must be federal laws against corporations allowing this to happen if, rather than proactively doing something like firing Rather and issuing corrections, they simple "let it ride".
Even if Viacom's board takes action in the next week or so, I suspect that the full story (when it comes out) will have further adverse effects on CBS/Viacom stock. Look for shareholder lawsuits in the not-too-distant future.
By the way, the reason I believe Rather may have conspired to do this is this. Why didn't he simply say the documents seem forged and that they will not look into this and reveal the sources? Well, if the sources would indict him, then he must do the seemingly irrational to keep fighting, all with the veneer of "protecting his sources".
They can't dump him just yet, he is CBS news, deciding who will replcae him must be a real scream.
This is all too sweet to watch unfold.
LOL
Can I recommend a great biz that handles faxes in a fab way? I heard ya gotta follow proper portal protocal when feedin' the devourous appetite of media moguls...
Ya just need to head over Abilene way...it's a cinch...they've already got the numbers you need built right into the fax memory...
If CBS ever categorically admits that the documents are forged, wouldn't the fact that someone committed a federal crime, in an attempt to take down a sitting President, become "the story", even with CBS?
This is the real story.
The fact is, Bush has been in office for four years, and no one gives a damn about his National Guard follies at this point.
The criminal forgeries (and Rather's foolishness) are the real stories...
Bump!
The Bill Clinton rule: "If no one says anything, they can't prove anything."
That should be done literally to CBS: The Buck stopping at its borders. All Republican political advertising planned for CBS should be redirected to the other big three and/or cable channels.
Republican candidates should boycott CBS reporters on campaign night, thereby further dooming the CBS wanna-be politicos.
They were very weak on this story last week. I guess they're more interested in protecting their profession than analyzing - the reason for their show.
The NEED a citizen blogger in one of those seats!
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