The world over, corporations face a crisis of reputation. The public perceives the instincts of business barons to be no different from the grand acquisitors of history, with no ethical limits in their search for power and wealth. In 1934, journalist Mathew Josephson’s book, The Robber Barons, reminded Americans of a generation of tycoons: J. Pierpont Morgan, Cornelius Vanderbilt, Jay Gould, John D. Rockefeller, who were active at the turn of the last century and who worked on the wild frontier of ethics and legality. Their opportunism in an underdeveloped market economy yielded fortunes as they built up empires in railways, finances, oil and steel.

Financial Times has published a report on the billions made by "the barons of bankruptcy" through the misfortunes of the largest US companies over the last 18 months. They are by now famous — Bernie Ebbers of WorldCom, Robert Annuziat and Gary Winnick of Global Crossing, Ken Lay and Jeff Skilling of Enron, and so on. They all made large personal fortunes from share sales that were based on privileged information. These events have implications for India. First, a national ability to enact a wide variety of laws and regulations; second, an entrepreneurial creativity in bypassing all of these; third, an incapability to enforce the laws and bring matters to a successful conclusion.

"Journalism is popular, but popular mainly as fiction," wrote G. K. Chesterton. This statement sets out the challenges for the business media. On the one hand, they have increasing reach and influence as literacy and prosperity rise; they bear a huge responsibility in sustaining democracy. It is this responsibility that allows a journalist to attack a public figure who he or she believes to be corrupt, even before incontrovertible evidence to support that belief is available.

On the other hand, no one can begin an investigation without some pre-determined notions. Thus, the journalist can ethically publish a story based on what may turn out to be an incorrect hypothesis, provided it is not a complete fabrication. The newsperson is permitted to cherry pick among the facts, quotes and data at hand, which would never be acceptable from a scientist or a lawyer.

From the businessperson’s point of view, it isn’t just the text of a news story that can mislead; it is also the choice of which stories get covered, by whom, where they are placed, whether it is accompanied by photographs and so on. Business people believe that what appears in the media has a huge influence on their stakeholders. However, as Steven Sample points out in his book, The Contrarian’s Guide to Leadership, "…many believe that if a story isn’t covered in Section A of The New York Times, it isn’t worth their knowing about it… To see how silly this approach is, you only need to read the NYT from 50 years ago and ask yourself whether the events that ultimately proved to be important in the long run were consistently receiving prominent coverage at that time."

There is a bit of the herd instinct among journalists, just as in the fashion and entertainment businesses. If some news or personality is ‘in’ it becomes the focus of attention. As a result, a degree of news and thought convergence is achieved inadvertently. This irks business. Further, newspapers sometimes get the facts wrong. Exceptions apart, these are not due to malice on the part of the reporters, but due to inadequate research and tight deadlines. The businessperson is left wondering whether, in fact, there is malice, a factor that cannot be ruled out in the context of rivalry among business houses.

Therefore, business and media need to develop a compass to guide thinking, to hone a sense of discrimination, to separate the chaff from the wheat. This way, the businessperson and the journalist can plough their respective furrows constructively. The sensationalism of a particular episode could be determined by answers to certain questions. Did some people gain personal wealth out of this episode? Was that wealth made by breach of law or by asymmetry of information? If personal aggrandisement is believed to have occurred, then the focus of attention logically should be on the person who has acquired the illegitimate wealth. People expect an early establishment of the facts, assurance that prompt recourse has been taken to legal and governance remedies available to the aggrieved party, and a speedy conclusion by the investigating authorities. This outlines a framework for good business journalism.

It is necessary to debate once again the ‘rules of engagement’ at a time when the Indian scenario will bear three features. First, heightened global activism by corporates, leading to increased public scrutiny of company actions; second, compared to the UK or the US, a large number of business papers chasing a much smaller business news market; third, increasing friction at the interface of business and journalism. It is now opportune for a formal interaction between the chambers of commerce and the media. Some form of collective reflection is essential as we cannot return to the methods of the robber barons of a century ago, exemplified by a letter from Cornelius Vanderbilt to his former business associates, "Gentlemen, you have undertaken to cheat me. I won’t sue you, for the law is too slow. I’ll ruin you."

* R. Gopalakrishnan is the executive director of Tata Sons and a member of the Group Corporate Centre. This article first appeared in The Times of India’s August 17, 2002, edition.