Published in CFO World
Have investors cottoned on to the importance of ethical business behaviour? Finance journalist Sally Percy reports.
You can’t buy a good reputation, but if you lose it, the cost to your business might be more than you ever imagined. Just ask media tycoon Rupert Murdoch or the executives at oil giant BP.
In May, Murdoch was accused of “willful blindness” and described as “not a fit person” to lead a major international company by a parliamentary committee over phone hacking at his UK newspaper publishers News International (NI). As a result of the scandal one of the newspapers involved, the News of the World, closed, and News Corp, NI’s parent company, had to abandon its takeover of broadcaster BSkyB.
Back in April 2010, BP accidentally unleashed the largest offshore oil spill in US history following an explosion on a rig in the Gulf of Mexico that killed 11 workers and injured 17 more. Investors voted with their feet. By the end of June 2010, £67 billion had been wiped off BP’s value and it had to cancel its shareholder dividends for that year.