"Ed Silverman" - Should James Murdoch Stay On The Glaxo Board?
July 19, 2011 PHARMALOT
By Ed Silverman // July 18th, 2011 // 9:35 am
http://www.pharmalot.com/2011/07/should-james-murdoch-remain-on-the-glaxo-board/
Media scandals enveloping governments are not the usual fare on this site, but there is an interesting aside to the Murdoch follies in the UK - James Murdoch, the 39-year-old son of the embattled Rupert Murdoch, is a member of the GlaxoSmithKline board. As you can see here, he is listed as a non-executive director, a role he has held since May 2009.
The Murdoch affair, of course, is all about bad behavior - charges that various employees in the Murdoch media empire in the UK hacked into phones belonging to families of murder victims, terror victims, police and politicians. Then there is the overlay of all-too-cozy relationships between the Murdoch regime and the highest reaches of the UK government, notably the prime minister.
What has any of this to do with Glaxo? Well, Rupert and James face increasingly harsh scrutiny. To wit, was there any adult supervision? Did the Murdochs knowingly condone hacking phones? And if they did not know, well, why not? All sorts of questions are on the table. And the scandal already runs deep and wide. But at its core, this raises a host of concerns about managerial skills, practices, philosophies and ethics at the highest reaches of the Murdoch empire, including James, who is chief operating officer of the News Corporation parent.
With this in mind, one wonders what James Murdoch can further add to the Glaxo board. After all, the pharma industry has its share of problems and Glaxo is no exception. The drugmaker paid a hefty $750 million fine to settle charges over production problems - contaminated meds, mislabeled packaging and incorrect dosages - at a facility in Puerto Rico and the feds say the investigation is ongoing (read more here and here). And a former Glaxo attorney was indicted for obstructing an FDA probe into off-label marketing, although charges against her were dismissed (look here).
The episodes underscore the need for board members who can offer useful guidance and not just about strategy, but also how to conduct affairs in a way that enhances corporate standing and builds needed relationships with shareholders, government, partners and patients. Consider that Murdoch sits on two committees - remuneration and…drum roll, please…corporate responsibility (see here and here). Of course, one may also argue that having a board member with experience in skullduggery has its benefits, but is that really a virtue? UPDATE: A Glaxo spokeswoman writes us to say that Murdoch has made a “strong contribution” to the board. “We believe that the full facts must be established and the ongoing investigations be allowed to take place and come to a considered conclusion.” What do you think?