London Calling — and News Corp. Listening In

The phone hacking scandal in Britain keeps getting more severe, with Rupert Murdoch’s media empire facing a crisis greater than any in its history. (The arrest of former News International chief and Murdoch darling Rebekah Brooks over the weekend and the death of a key whistleblower were among the latest developments, as of this writing.)

Peter Drucker witnessed plenty of malfeasance over the course of his career, and so he would not necessarily have been surprised by the allegations that Murdoch’s newspaper unit in London has been the headquarters of a vast and illegal surveillance operation. One thing Drucker believed, though, was that deflecting blame was indefensible. Indeed, as we’ve noted, Drucker thought that leaders must adopt a strict buck-stops-here standard.

[EXPAND More]In this case, the Murdoch family tried for several years to promote the idea that it was a “rogue” reporter (or maybe a few) who was responsible for all the wrongdoing. This has been their way of trying to insulate senior management at parent company News Corp. from accusations of misconduct.

But at the very least—and this assumes that Murdoch didn’t actually know of the phone hacking—it’s those at the top who set the parameters of conduct for the entire organization. “It should be clearly understood what behavior and methods the company bars as unethical, unprofessional or unsound,” Drucker counseled in The Practice of Management, even if “within those limits” individual employees “must be free to decide” how they act.

Yet if they then decide to do the wrong thing, that, too, ultimately falls on the CEO’s shoulders. “A chief executive is the court of last resort and has ultimate accountability,” Drucker wrote. “And the chief executive also has to make sure to get the information necessary to discharge this ultimate accountability.”

What do you think? Even if Rupert Murdoch didn’t know about the hacking, is he still culpable? [/EXPAND]