CHAPTER 7 Writing and reporting tips
“I wish you and your families a slow and painful death.”
— Fausto Tonna, former finance director of Italy’s Parmalat SpA, to journalists as police led him from jail to court.
Journalists rarely get any thanks from the movers and shakers whose careers come to a screeching halt or who wind up in prison as a result of scandals uncovered by the press.
Some executives and directors see the journalist’s role as serving the market or investors. Most journalists have a different view: The press as watchdog, with a professional duty to uncover and write about a company’s activities, including corporate malpractice.
“The current crisis illustrates perfectly that insistent, drumbeat, muckraking reporting about systemic abuses in the lending industry, for one, would have provided the vital, long-term warnings that investors clearly lacked,” Dean Starkman wrote in The Audit, a blog about the business press for the Columbia Journalism Review.
How do corporate governance issues dovetail with this watchdog responsibility? The answer is that often, corporate governance principles — or flagrant disregard for them — are at the heart of developing stories at companies. When scandals unfold, investors and regulators immediately ask one overriding question: “Where was the board?”
The chain of events in 2011 at Olympus Corp., Japan’s camera and endoscope manufacturer, seemed to start out as a cultural clash between the company’s British CEO and its Japanese board. At least, that’s what Olympus chairman Tsuyoshi Kikukawa gave as the reason the company ousted Chief Executive Michael Woodward.
Before long, though, journalists — tipped by Woodward — learned that the real problem was that Woodward was trying to hold the board and former executives account¬able for a series of questionable transactions designed to hide huge losses. Kikukawa was forced to resign as chairman, shareholders lodged lawsuits, regulators investigated and the Olympus board’s failures — not a cultural clash between a British executive and a Japanese board, as the board had claimed — became the center of attention.