When is resignation right for crisis management?

Rebekah Brooks took far too long to realise that the only option left open to her to protect her reputation (such as it now is) and, more importantly, News International’s reputation (such as it now is) was for her to resign. She might have had “total” support from Rupert Murdoch six days ago but there was little evidence of support outside the murky Murdoch world and it is always the outside view that counts for more.

It was not only crisis management experts who were aghast at her brazen attitude by clinging on, not to mention their brazen attitude by holding a surreal walkabout in an attempt to show that they were all in this together. We knew they were all in this together – up to their necks in it together – but it was not the togetherness that mattered. It was the subject – and the public was aghast at their arrogant attempts at toughing it out.

When crisis management gets to the point where you think the right thing to do is to tough it out – it’s not. It’s time to bow out – because you have made the wrong thing (you) the focus. If the crisis affects the business, it is the business’s reputation, not yours, that matters.

So, when should Rebekah Brooks have resigned?

She was not editor of the News of the World when, in 2005, Clive Goodman, the News of the World’s royal editor, and Glenn Mulcaire, private investigator, were arrested for illegally phone hacking Prince William’s phone. Nor was she editor of the News of the World when, in 2007, Goodman and Mulcaire were jailed. She was editor of The Sun. She was promoted to chief executive of News International on 1st Sepember 2009 at which point she became responsible, overall, for all the newspapers in the News International group. Phone hacking must have been on her agenda as a topic of concern; she should immediately have ordered, and announced, a clean sweep through all News International’s policies and set new standards.

When, in February 2010, the House of Commons culture, media and sport committee said it thought it inconceivable that no-one other than Clive Goodman knew about phone hacking at the News of the World, Rebekah Brooks should have announced that she had taken action to find out what exactly was going on and act on her findings. You can’t be at the top and ignore what is going on – even if the allegations apply to a time when you were not associated with the News of the World. It is now, and the future, that matter.

New allegations emerged in September 2010; Scotland Yard reopened its inquiry and the story began to snowball. The spotlight fell on Andy Coulson more than on Rebekah Brooks – but what was she up to, as chief executive? Instigating changes? Apologising? Or just hanging on?

In April 2011 News International apologised to some of those whose phones were hacked – and set aside a £15m fund for compensation claims. Resigning now, allowing a new chief executive to clear things up, would have meant a short, sharp burst of publicity followed by recovery. But she hung on.

On 4th July, The Guardian alleged that the News of the World hacked into Milly Dowler’s phone when Rebekah Brooks was editor of the News of the World. And what was her reaction? To shift blame by saying that she was on holiday. Astonishing. It did not wash. If you are in charge, you take responsibility whether you are working at your desk or paddling in the sea. It is your policy and your approach which are being followed – wherever you are. And if it is going on behind your back, all the public can conclude is that you are a weak and ineffective leader. You must go.

Arguing that you need to stay to oversee the clean up operation – otherwise known as doing a Willie Walsh – is short-term desperation that has nothing to do with saving the business; it is about saving you. Rebekah Brooks’ stance was indefensible as chief executive; it did even more damage to her own reputation, News of the World’s reputation, and News International’s reputation. It was clear that she was not up to the job. But still she hung on.

Hanging on is almost always a sign of ego getting in the way of business sense. If you want to limit the damage of a crisis, the time to resign is the minute it begins to affect the reputation of the business (or your own, if it is a personal crisis). Hanging on only prolongs the agony by highlighting wrongdoings (more claims, more criticism from public figures including prime minister David Cameron, the FBI, a major shareholder); increasing risks to other aspects of the business (BSkyB, ownership of other News International titles, US titles, other titles around the world); and sends costs spiralling – and not just the cost of flying in from afar, time spent at meetings and advertisements to say sorry and we won’t do it again, it is the costs-to-come of repairing a now much more seriously damaged reputation: Rebekah Brooks’ reputation, News International’s reputation, News Corp’s reputation, Rupert Murdoch’s reputation, James Murdoch’s reputation and, inevitably, the reputation of the entire British press.

Ironically, we might end up thanking Rebekah Brooks for hanging on while doing nothing at News International and inadvertently tackling tabloid tactics.

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1 Response so far »

  1. 1

    Caroline Atkinson said,

    July 16, 2011 @ 10:09 am

    I totally agree – it would have been appropriate for her to resign in April 2010. I also think your point about her organising a review as soon as she took over might have prevented much of the subsequent problems for the entire group, and would probably have meant she didn’t need to resign.

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