BUSINESS MORALS:In today's world of instant communication, business leaders are increasingly in the media spotlight for more than just their bottom line. What can they do when faced with a scandal?
FOR A JUICY sex scandal that will drag on for months, tarnish the reputation of your company and sell newspapers by the truckload, you'll need one S&M dungeon, a handful of prostitutes, a soupçon of alleged fascism, a dollop of moral indignation and a sprinkling of MI5 spookery boiled with tabloid fury.
FIA president Max Mosley almost certainly wishes the recipe for a scandal wasn't quite so easy to pull together.
In April, the News of the Worldpublished a series of allegations claiming the 68-year-old head of world motor sport, a multi-billion euro business, was a "secret sado-masochistic pervert". It carried extensive details of his involvement with prostitutes at a Chelsea flat in an orgy which, the paper claimed, had Nazi connotations.
In this multimedia age, the paper decided it was no longer enough to merely publish such claims and went a step further by posting videos of the orgy on its website. One grainy clip, which showed Mosley prostrate at the sharp end of a whip proved so popular it nearly brought the NOTW site to its knees under the weight of the record numbers of disgusted readers who flocked to watch so they could be properly outraged.
Since the scandal broke, Mosley faced down demands for his resignation, winning a secret ballot of FIA members organisations last month. He insists that his sexual preferences should be no reason to drive him from office. He has admitted to eccentricity and said he was interested in sado-masochistic sex, but insists it was no one's business but his own.
"I think most adults would say that whatever in that spectrum somebody does, provided it doesn't hurt anybody, provided it's consensual, provided it's among adults, provided it's in private, it concerns nobody but the people doing it," he has said.
"It's outrageous, because the whole thing was predicated around the idea that this was some sort of Nazi orgy," he said. "And the Nazi aspect of that is absolutely untrue. In fact it was a deliberate, cold-blooded, calculated lie, to which there's no basis at all. So that was really annoying because obviously the main subject was embarrassing to say the least, but to have the Nazi connotation placed on it when it was completely untrue was extremely annoying."
The "Nazi connotation" is particularly damaging for Mosley because he is the youngest son of the British fascist leader Sir Oswald Mosley. He is suing the News of the Worldfor "unlimited damages" for the invasion of his privacy.
While it has never taken long for a political sex scandal to reach critical mass and catching celebrities coked up with their pants down is pretty commonplace, the targeting of business people is not so common and can, as in this case, drag on and on and do inestimable damage to a business and its top executive.
Ireland's public relations queen, Terry Prone, a woman to whom many top business people and politicians have come for help after becoming embroiled in all manner of scrapes and scandals, believes Mosley has behaved very foolishly indeed, and has left himself entirely exposed on a number of levels.
"Even if a chief executive's actions do not directly affect the share value of a company, the risk to that firm from something like this can be much too high," she says. Anything that touches on the holocaust or child pornography is, she says, unforgivable in all circumstances, and top executives caught looking at pornography on company computers are also vulnerable to dismissal as their actions raise serious questions about their judgement and their attitude to employees.
She says that while it may look like the corporate world has become more conservative in recent years, it is not really the case. "The law has changed and, critically, people's understanding of the law has changed", and it is consequently more difficult to escape opprobrium. Technology has changed too. Mobile phones, e-mail servers and computer histories leave trails which are impossible to cover up, and have the "half life of enriched uranium and can be just as dangerous" she says.
"People need to be aware that they are living in a permeable atmosphere. If someone, be they a business person or whatever, is even mildly known to the public, they need to be always on their guard. If they get blind drunk and do something stupid, then there will be always be a mobile phone around and the consequential images will always be saleable."
One Irish businessman who did get blind drunk and did do something very stupid is Ben Dunne. His 1992 sex, drugs and panic attacks misadventure in Florida had consequences for Ireland's political and business elite which are still being felt some 16 years later. With cocaine and a call girl and a panic-fuelled stand off with armed US police, the story had legs long enough to run and run, but even the most excitable fantasist could scarcely have imagined where the story would eventually lead.
It quickly brought about Dunne's removal from the family business after a bitter legal wrangle with his siblings. It cost Fine Gael high flier Michael Lowry his ministerial Merc and his party, and led journalists directly to the source of a good chunk of Charles Haughey's cash - the Big Fella himself. It created the McCracken and the Moriarty Tribunals and exposed the Ansbacher accounts which some of the State's richest people had used to hide cash from the taxman.
Despite being at the centre of one of the biggest scandals in the history of the State, Dunne remains remarkably popular among many Irish people. When the filming of each episode of Highly Recommended, the RTÉ show on which both this writer and Dunne served as judges last year, ended, he was always swamped with well-wishers - men and women in their 50s and 60s who wanted to shake his hand and have their picture take with him.
Dunne attributes his continued popularity to his frank admissions of wrongdoing. He believes that business people, particularly those in the public eye, must accept they're going to be under much closer scrutiny from the press. "A lot of people like to use the media for their own ends, but when the media turns on them for whatever reason, they really don't like it. I have never seen the media print anything about me that wasn't the truth. They might have put a slant on a story that I didn't like, but the reporting has never been untruthful."
While being at the centre of a major scandal was stressful, media attention was the least of his problems. "I was in so much difficulty personally that the media was way down my list of priorities. I couldn't ignore it, obviously, but my own personal problems outweighed all the coverage. The thing is that whether you are on the front pages or not, it is the same handful of people who you know you have hurt."
Dunne does not believe that people who become involved in scandals "of whatever nature" are ultimately driven out of their jobs because they are held to moral account by the press and found wanting "although that is certainly who they like to blame". He says that when "your colleagues start biting at your heels you know the game is up. Once you lose the support of your colleagues you're gone - everyone blames the media, they're an easy target, but I don't think that is the case at all."
In addition to blaming the media for their problems, many who get caught in the glare of a scandal's searchlights duck into the shadow of a PR company, issue a mealy-mouthed and distinctly conditional statement and hope the problem goes away. Such an approach rarely, if ever works and Prone cautions against it. "Someone who comes out and says 'I did it. I am ashamed of what I did. I am really sorry for all the hurt I have caused' is likely to get a much better reaction". She believes "Ireland is an infinitely forgiving place and in such circumstances will probably end up liking someone more. A straight man doing some straight talking will get out of so many problems that a PR company could never get him out of."
INAPPROPRIATE BEHAVIOUR A UNIVERSAL PROBLEM
• More a man of God than Mammon, the Rev Ted Haggard, still found himself in charge of a multi-million dollar business with the National Association of Evangelicals.
He was also one of the US's most influential Christian leaders until forced to resign in 2006 after admitting buying crystal meths from a gay escort in Denver. He strenuously denied that he ever had sex with the man, Michael Forest Jones, who insisted they had had an affair lasting three years.
• In 2005 Boeing chief executive Harry Stonecipher resigned due to what the company said was an improper relationship with a female executive. Although their relationship was consensual and the executive, Debra Peabody (who also later resigned) did not report directly to him, Boeing sacked him because the relationship violated its code of conduct.
"The board concluded that the facts reflected poorly on Harry's judgement and would impair his ability to lead the company," the company concluded.
• Four years ago, the chief executive of the Bank of Ireland Michael Soden resigned after material of an adult nature, which contravened company policy, was found on his work computer. He had only been with the bank for two years when bank governor Laurence Crowley raised with him his use of the website, which Soden said he had strayed on to. Bank of Ireland made a €2.3 million severance payment and a €400,000 pension fund top-up.
• In 2005 Volkswagen managers in Germany funnelled $2.9 million in secret payments to the company's labour leader and supervisory board member Klaus Volkert. An internal investigation showed that he used the payments for "pleasure trips" including parties and prostitutes for himself and other VW labour representatives.
• The former deputy chairman of Kenmare Resources, Donal Kinsella was forced off its board after an alleged incident during a visit to Mozambique. Going to bed after a company dinner, he went naked three times to the bedroom of a female secretary. There was no suggestion that anything improper happened and he claimed he was sleepwalking. The shareholders had little sympathy and voted at an egm to remove him from the board.
