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Wednesday
Aug152012

Murdoch Issues Compliance Manifesto

News Corp. boss Rupert Murdoch said in a memo to his employees Wednesday that he's beefing up the company's antibribery training and reviewing its compliance programs because of the phone hacking and bribery scandal.

More than a dozen journalists from News Corp.'s U.K. papers have been arrested. After the scandal broke last July, Murdoch closed the News of the World; the Sun is still in publication.

Those arrested are suspected of bribing police and public officials to gain confidential information.

Murdoch said the review isn't based on any suspicion of wrongdoing by anyone in the company. It's 'a forward-looking review,' he said, 'based on our commitment to improve anti-corruption controls throughout the company.'

*     *     *

Here's the full text of Rupert Murdoch's memo to his staff:

Dear Colleagues,

As you are all aware, our company has been under intense scrutiny in the United Kingdom. I assured parliament and the Leveson inquiry that we would move quickly and aggressively to redress wrongdoing, co-operate with law enforcement officials and strengthen our compliance and ethics programme company-wide. With the support of our board of directors, I am pleased to tell you that we have made progress on each of these important steps.

Gerson Zweifach, senior executive vice-president and group general counsel, News Corporation, is now our chief compliance officer and has assumed overall responsibility for our effort to create a more robust global compliance and ethics programme. Lisa Fleischman, vice-president and associate general counsel, News Corporation, is our deputy chief compliance officer and will exercise day-to-day operational responsibility for the global compliance and ethics programme. In these capacities, Gerson and Lisa will report regularly to the board of directors and the audit committee regarding the content and operation of the compliance and ethics programme.

For purposes of the compliance and ethics programme, all of our business units will be organised into five compliance groups: the LA Cable and Broadcast Group; the LA Film and TV Production Group; the Europe and Asia Group; the Australia Group; and the New York News and Information Group. Each group will be headed by a group chief compliance officer who will report directly to Gerson and will focus full-time on compliance issues.

We have already strengthened and expanded our anti-bribery training programmes. To ensure the effectiveness of our entire compliance and ethics programme, we have recently initiated a review of anti-corruption controls in selected locations around the globe. The purpose of this review is to test our current internal controls and identify ways in which we can enhance them. Let me emphasise that the review is not based on any suspicion of wrongdoing by any particular business unit or its personnel. Rather, it is a forward-looking review based on our commitment to improve anti-corruption controls throughout the company.

We recognise that strengthening our compliance programmes will take time and resources, but the costs of non-compliance – in terms of reputational harm, investigations, lawsuits, and distraction from our mission to deliver on our promise to consumers – are far more serious.

As one of the world's most innovative media companies, News Corporation serves a vital role in the global marketplace of ideas. Every day, hundreds of millions of people rely on us to provide high-quality news, sports programming, and entertainment. To continue to be worthy of the trust of our audiences around the world, we all have an affirmative obligation to adhere to the highest standards of ethical behaviour, consistent with our standards of business conduct. The enhancements to the compliance function that are already underway and that we are planning will help us to maintain those standards.

Please join with me in this important effort and give it your full co-operation and support.

Rupert Murdoch

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