University of Leeds
Institute of Communication Studies: MA Dissertation
The Business/Financial Journalism:
The Role and The Ways to Be Independent from The
News Sources
Shigeru Endo
(MA in International Journalism)
1 September, 2006
CONTENTS
Acknowledgements
Abstract
4
5
Chapter 1
6
INTRODUCTION
Chapter 2 LITERATURE REVIEW
2-1 The Nature of Corporations
2-1-1 The Pursuit of Profit
2-1-2 Perception Management and PR
2-1-3 The Presence of Corporations Is Bigger
2-2 The Role of Business/Financial Journalism
2-2-1 Journalism and Democracy
2-2-2 Business/Financial Journalism
2-2-3 Problems of Business/Financial Journalism
2-2-4 The Way to Be Independent
2-3 Propaganda Model
2-3-1 Ownership
2-3-2 Advertising
2-3-3 Limited News Sources
2-3-4 Flak
2-3-5 Anti-Communism
2-3-6 The Model Is Still Applicable
2-3-7 Criticism
12
12
12
13
17
18
19
20
21
24
25
26
26
27
28
29
29
30
Chapter 3 BACKGROUNDS
3-1 The Frauds
3-1-1 Enron
3-1-2 WorldCom and Livedoor
3-1-3 The Sarbanes – Oxley Act
3-2 The Cases of Insider Trading in News Organisation
3-2-1 The Mirror
3-2-2 Nikkei
3-2-3 Codes of Conduct
32
32
32
35
36
37
37
39
40
2
Chapter 4 METHODOLOGY
4-1 Interviews
4-2 Questionnaires
4-3 Limitations and Difficulties
42
43
44
45
Chapter 5 FINDINGS
46
5-1 Role of Business/Financial Journalism
46
5-2 The Problems in Reality
53
5-2-1 Narrow Angles
53
5-2-2 Lack of Knowledge
55
5-2-3 Editors and Journalists Relationships
55
5-2-4 Concerns on Regulations
57
5-2-5 Routine
58
5-2-6 Unfairness
59
5-3 The Reason Why Business/Financial Journalism Failed to Detect
The Frauds such as Enron and WorldCom
60
5-4 Power of PR
62
5-5 Business Aspects of News Organisation
63
5-6 The Way to Avoid The Manipulation from The Sources
65
5-6-1 Education
65
5-6-2 Multiple Souces
67
5-6-3 Transparency in Reports
69
5-6-4 Strong Attitude to Complaints
71
5-6-5 Codes of Practice
72
Chapter 6 CONCLUSION
76
BIBLIOGRAPHY
LIST OF THE INTERVIEWEES
79
84
Appendix
85
1. Code of Practice, Press Complaints Commission (PCC)
85
2. The Financial Times Department: Code of Practice
3. The Interview with William Dawkins
86
88
3
ACKNOWLEDGEMENTS
This dissertation is a compilation of my life as a journalist in Japan and a postgraduate
student in the United Kingdom. From building the structure of this paper to interviews
and research, the whole process was very stimulating experience. Now I finally reached
to finish this research, and I would like to express my gratitude to this opportunity to
study and research in the United Kingdom.
I would like to express my thanks to the journalists who accepted my offer even though
they are extremely busy. I am grateful to William Dawkins, Dan Bogler, Nigel Scott,
Joanna Blythman, Mitsutoshi Kouta, Naoko Miyashita, Masahide Inatome, and
Kazuyuki Sasaki for providing the stories of their precious experiences in
business/financial journalism. I really need to thank Michael Rowles at the University
of Leeds, the supervisor of this research, who introduced me many informative websites,
books, and people to whom I should contact, and always kept encouraging me at the
very last moment. I really appreciate the support. In addition, I would like to thank
Katrin Voltmer and Robin Brown who were my module leaders at the University of
Leeds, and inspired me very much in the areas of communication and journalism studies.
The discussion became the basis of this research.
In addition, I would like to thank to the British Council for the support my life in the
United Kingdom. Because of its support, I could concentrate on my study and obtain the
opportunities to meet many interesting people.
I would like to show my biggest gratitude to my friends who I met at University of
Leeds all over the world. Through the discussion, I changed many points of views.
Finally, I am really grateful to my parents and my brother for their support and trust.
4
ABSTRACT
In recent years, the activity of corporations spreads globally and their influential power
increase very much. The powerful in politics is generally examined by election in
democracy, but what about corporations? In this context, the role of journalism is
significant to detect their wrong doings for the public. However, to what extent, is
journalism successful to detect them and warn people in reality? If it is difficult, what
are the reasons? How do the actual journalists tackle to pursue their role? This paper
focuses on “business/financial journalism” which is considered to specialise in
economic matters, and examines its role, problems and the way for journalists to tackle
them. This dissertation tries to answer these questions by using the Herman and
Chomsky’s propaganda model, as well as through interviews with actual journalists
working for business/financial news organisations in London, Leeds and Tokyo. It
concludes that it is actually hard for journalists to detect frauds, but they pursue their
role through education, self-regulation, and being transparent in the articles.
5
Chapter 1
INTRODUCTION
Journalism is expected to report the truth and to play a watchdog for the powerful. The
powerful is now not only governments but also corporations. This is the time of
globalisation and people are influenced by corporations through employment, their
products and services, and the like. Besides, as the scandal of Enron shows, they
sometimes commit the fraud which causes a huge loss among investors.
Business/financial journalism always report about corporations, but to what extent is it
successful to detect the truth? If it is difficult, why and what is the obstacle?
The aim of this paper is to examine the role of business/financial journalism in
democratic society. What is the role and how business/financial journalists
communicate with their news sources? Business/financial journalism usually deals with
companies’ profitability, their strategies to expand their business, their new products and
services, the movements of their stock prices and the like. Like other journalism which
covers political issues or social problems, business/financial journalism has an
influential power in society. Some citizens may choose the products based on the
6
information through the media’s reports, and some may invest a company’s stock
because of the newspaper’s articles on its profitability.
This research topic stems from my career as a business/financial journalist at the Nihon
Keizai Shimbun, Inc. (Nikkei). For thirteen years, I have worked for this Japanese
economic daily newspaper and I now cover about forty public companies in Japan. The
news gathering process consists of calls from sources, mainly the public relations team
of companies. Furthermore, leaked information such as business strategy plans, business
restructuring, and financial situation provide news lead. The routine consists of having
the interview with my sources, and write about a company’s stories. On the day of
reporting the story, the company’s stock goes up and down sharply, making me wonder
whether my stories have been triggering a company’s stock be bought or sold. The
question is whether or not he has been manipulated by his news sources that have the
intention to make their stock price move.
The hypothesis of this paper is that some of the business/financial journalists feel their
role cynically, and realise it for just professional investors, bankers and other limited
people. In addition, the others may feel their sources’ intention to manipulate the
7
contents of reporting, and lose their way to understand their role in society. Almost all
journalists may have their own self-regulation to tackle with the manipulation or other
pressures.
It is possible to say that a company is the one of the most influential factors in society
just like a politician. It affects the individual life through its products and services, so it
is a powerful actor in society. A politician, another powerful actor in society, is
examined by citizens through election, but how is a corporation checked and analysed
by them? The business/financial journalism can play the role of watchdog to company’s
wrong doings, and to provide citizens the information to judge the company.
Most major companies have a public relations (PR) department that communicates with
journalists through press releases, briefings, and special events. Some companies use
independent PR agencies as well. The PR people approach business/financial journalists
to let them report the stories favourably and sometimes blocks from journalists’
investigation about the companies’ scandals or other negative reports. When the
journalists are passive to obtain companies’ information and the PR people’s attempt to
manipulate works well, the reports on companies will be just like “free advertisement”.
8
PR can work as ‘manipulator’ for journalists. In that case, it is impossible to call the
reports as journalism.
In other words, the reports will have a risk to create the
companies’ good and positive images in public, even though the reality will be different.
The rise of PR makes it difficult for journalists to act independently. When journalists
try to confirm a news lead about the company, the questions will be diverted to the PR
section in the company. To obtain some information, journalists need to have their own
network not relying on the PR only.
To compare with political journalism, business/financial issues have some jargons. For
example, the financial market system and the related laws take time for journalists to
understand these issues. This complexity will make journalists rely on the sources’
knowledge, and the reports will be possibly manipulated or at least shaped by the
sources.
In addition, the Internet era allows many companies the creation of their own websites.
It is possible for them to provide the information directly to the citizens in ways that suit
them. The information on the websites is mainly what the companies want to appeal,
9
and can be overloaded. To sort them out, the public relies on business/financial
journalism to provide objective information.
To compare with political journalism, business/financial journalism is not frequently
discussed in the academic arena. One of the reasons may be the accessibility for the
scholars to the people concerned. The process of news production is not open but
private, and the people in journalism and companies’ PR team hesitate to talk about it. It
is actually difficult to initiate communication between journalists and PR people or
news sources on business/financial issues directly.
In this paper, the first section is literature review. At the beginning the characteristics of
the corporations are discussed. Corporations sometimes do not care the governmental
rules for pursuing their own profit. The role of public relations is also argued. Next, the
role of journalism is discussed. It includes the characteristics of business/financial
journalism. In addition, Herman and Chomsky’s propaganda model is examined. This
model can be referred to analyse in the findings.
As back ground information, the actual business incidents are argued such as Enron and
10
the insider dealing incidents in The Mirror and Nikkei. In addition, the Press Complaints
Commission’s Code of Practice is discussed as an example of self-regulation.
This research conducts the interviews with the actual business/financial journalists and
corporate public relations people. The section of Findings is based on these interviews.
11
Chapter 2
LITERATURE REVIEW
2-1. The Nature of Corporations
The main news sources for business/financial journalism are people in corporations.
They provide and leak the information, and it will lead to the news. To examine the role
of business/financial journalism and the way of communication between journalists and
news sources, the discussion on the nature of corporation will be the basis of the
analysis.
2-1-1.The Pursuit of Profit
Chomsky points out “The goal for corporations is to maximise profit and market share”
(Bakan 2004: 174). One example of this is Phizer, a pharmaceutical company. The
reason why Phizer makes drugs to treat not malaria and tuberculosis but baldness and
impotence is because of making profit. Malaria and tuberculosis are killer disease in
developing countries, but the cost to develop them is high. On the other hand, drugs to
treat baldness and impotence are mainly sold in developed countries where Phizer can
12
make profit (Bakan 2004: 49).
There is obviously pressure from shareholders to the executives in corporations. A
shareholder activist, Robert Monk says in the documentary film ‘The Corporation’ as “I
don’t really care what the chairman of General Motors thinks” and the decision on the
appropriate level of emissions “must be made by government and not by corporations”.
Former Chief Executive Officer (CEO) of The Goodyear Tire & Rubber Company, Sam
Gibara describes his pressure as a CEO in the same film. He talks that lay offs are tough
decision but it is necessary to do because of “the consequence of modern capitalism”. In
addition, he says “No job, in my experience with Goodyear has been as frustrating as
the CEO job. Because even though the perception is that you have absolute power to do
whatever you want, the reality is you don’t have that power”
2-1-2. Perception Management and PR
In the pressure to make profit, corporations pursue to control the public through public
relations (PR) activity with using the media. One of the resources for profit is the
public’s consumption. It is significant for corporations to be recognised by public
13
positively, because “Companies are abstract entities (not people with feelings, families,
etc.) audiences may feel freer to doubt and harshly criticize companies in public”
(Rosenfeld et al. 2002: 198).
.
Rosenfeld et al. introduce the concept, “impression management”. They define the goal
of it as “to be liked by others and to be seen as normal”, and “a mutual ritual that helps
smooth and control social relations and avoid embarrassment” (2002: 1, 5). For example,
annual reports, letters to stock holders, and press releases are the actual actions to create
the images. Impression management contributes to make and present “a positive
picture”, and sometimes to control the damage at the minimum level.
Chris Komisarjevsky, a former CEO of a public relations company, Burson Marsteller,
talks about the perception management in the film, ‘The Corporation’:
“Perception management is a very interesting concept. It’s basically a
methodology, which helps us when we work with our clients to go through
a very systematic thoughtful process in order to be able to help our clients
identify what the resources are that they have, what the barriers to their
success are and how we can use communications to help them accomplish
their objectives”.
Burson Marsteller had worked with Philip Morris to organise the National Smokers
14
Alliance to fight anti-smoking laws, and with Union Carbide to support its PR after gas
leak which caused 20,000 dead in Bhopal. It helps to create the situation for the
companies to make profit easily.
When companies use the perception management, they try to cover the truth. In the
eighties, an American automobile company, Chrysler (now it is called DaimlerChrysler
Corporation) was widely recognised its financial problems. The parts suppliers became
reluctant to ship their parts because they were afraid of the situation not to be paid for
the parts. Chrysler needed to encourage the supplier to keep its business even though it
did not have enough money. What Chrysler did was to show the suppliers its future
products and let them understand the future of the business as stable and usual.
Chrysler’s attitude is impression management (Rosenfeld 2002: 23). It is the way for
companies to shift the agenda favourably.
Another way of perception management is “pseudo event”. Boorstin introduces this
concept. For example, in order to increase one hotel’s prestige, the PR suggests having
the hotel’s thirtieth anniversary. The event is planned for the media coverage (1961:10).
15
The nature of PR is “to block unwelcome mainstream coverage” (Davis 2000: 299) so
the PR deals with the perception management well. Richards discusses that the relations
with the media is important because of its power to mould public opinions and
perceptions. He talks about “spin doctors”, and explains it is not only for political
organisations, but also for corporations. The job of spin doctors tries to manipulate the
public. Richards explains “In communications, there is a gap between the facts and a
person’s understanding of them, and this gap is where the spin doctor operates” (2005:
8).
Chomsky summarises this point in Bakan’s book ‘The Corporation’ as “They have to be
turned into completely mindless consumers of goods that they do not want. You have to
develop what are called ‘created wants’. So you have to create wants”. To create wants,
companies need to make up the atmosphere to let people want to buy. Chomsky
continues “We have huge industries, public relations industries, monstrous industry
advertising and so on. They are designed to try to mould people from infancy into this
desired pattern” (Bakan 2004: 174).
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2-1-3. The Presence of Corporations Is Bigger
When it comes to control people, “force” is considered as an efficient way in politics.
However, it is difficult to use force in democratic society, the PR industry has emerged
to influence people. In other words, corporation is getting the power to control the
public more than governments. Chomsky says “Today it’s not so much government that
exercises control, but corporations” and “Now private tyrannies –corporate systemsplay the role of controlling opinions and attitudes” (Chomsky and Barsamian 2005: 22).
In the documentary film, ‘The Corporation’, Gibara also talks that the governments
become less powerful than the corporations.
“Corporations have gone global and by going global, the governments
have lost some control over corporations regardless of whether the
corporation can be trusted or cannot be trusted, governments today do not
have over the corporations the power that they had, and the leverage they
had fifty or sixty years ago. And that’s a major change. So governments
have become powerless compared to what they were before”.
Companies actually break the rules to pursue their own profit even though the
government set the rule not to trade with certain countries because of the political
reasons. For example, the United States announces the list of penalties which violates
the regulation of the Office of Foreign Assets Control (OFAC). According to OFAC’s
17
information which was released in July 2006, “Chevy Chase Bank processed an
unauthorised funds transfer with payment information referencing service of Iranian
origin”.1
According to Bakan, General Electric has breached laws such as discrimination against
employees, pollution, deceptive advertising and the like, and show how the company
does not care the rules because of pursuit for their profit (2004: 75-79). The cost of
penalty is less than the cost of compliance. Bakan quotes one shareholder activist
comments that the violation of the rules is just a business decision (2004: 80).
2-2 The Role of Business/Financial Journalism
In the previous section, the nature of corporations was argued. They pursue profit and
use the perception management which causes the gap between the reality and the
perception of people for making profit. In addition, the presence is bigger than
governments now, and they sometimes engage unlawful behaviour. The media tend to
be used by corporation to make profit, because it has an influential power to the public.
1
See OFAC information in US Department of the Treasury website.
(http://www.treas.gov/offices/enforcement/ofac/civpen/penalties/05052006.pdf)
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In this section, the role of journalism is discussed to examine how to build the
relationship for the journalists with their news sources, corporations. At the beginning,
the role of journalism in democratic society is argued as a basement of the discussion.
Next, it specifically focuses on business/financial journalism, and lastly its problems are
examined.
2-2-1. Journalism and Democracy
Journalism provides people the information to help them understand the world and
make decision on particular issues (Franklin et al. 2005: 124). Journalism also has an
obligation to be loyal to interests of citizens. This differentiates journalism from the
business such as information service provider or PR industry.
Strömbäck discusses its indispensable relationship between journalism and democracy.
In democratic society, freedom of speech, expression, and information is necessary for
citizens, and journalism needs the independence from the state (2005:332). This scholar
classifies four pattern of democracy in terms of matureness. In the process of evolution,
the role of journalism is getting complicated. At the premature stage of democracy,
journalism’s role is just to act as a watchdog for a powerful or burglar alarm exposing
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wrong doings. This is the basic role in democracy. At the mature stage, journalism plays
a role to set the agenda, mobilise citizens’ interest, and present public discussions.
Kovach and Rosenstiel summarise that there are the nine basic elements of journalism:
(1)journalism’s first obligation is to the truth (2)its first loyalty is to citizens (3)its
essence is a discipline of verification (4)its practitioners must maintain independence
from those they cover (5)it must serve as an independent monitor of power (6)it must
provide a forum for public criticism and compromise (7)it must strive to make the
significant interesting and relevant (8)it must keep the news comprehensive and
proportional (9)its practitioners must be allowed to exercise their personal conscience
(2001: 12).
2-2-2. Business/Financial Journalism
Business/financial journalism is a part of the journalism and there are the same
expectations from the public as discussed above. It covers economic issues such as the
central bank’s monetary policy, the movement of economic index, companies’ strategies,
companies’ earnings, and the like. However, the contents of business/financial
journalism require journalists to have the basic knowledge of economy, and its audience
20
has specifically financial concerns to read or see the business/financial media (PS
Burton 2002).
Its audience is not only the individuals but also the professionals such as the bankers,
fund managers, the companies’ executives, the academic people and the like. Some of
the audience may make decisions to sell or buy the stocks or the foreign currencies, and
demand quick information. In response to this demand, for example, Reuters has started
to provide the electric machines which show not only the business/ financial news but
also the economic indexes on the screen all at once (Hargreaves 2005: 106). This will be
the risk to change business/financial journalism into information service provider
business.
2-2-3. Problems of Business/Financial Journalism
One of the problems of the business/financial journalism is to fail to draw a big picture
of the story. Davis discusses “business news will always follow corporate agendas and
ignore non-corporate interests” (2000: 286). The agenda tends to focus on financial
issues too much. Hargreaves, who has experience working for the Financial Times for
fifteen years, confesses its characteristics as “the atmosphere was intellectually bracing
21
and wonderfully international. But it could also be deadeningly narrow” (Hargreaves
2005: 90).
Another problem is that the business/financial journalism misses to predict and warn
future incidents, and contributes to economic boom. According to Uskali, the reason is
“the business journalists need to find ‘scoops’ in order to satisfy their paying customers”.
Their sources are the analysts and investors who judge the trend quickly and roughly
and invest based on their assumption. He argues that the business/financial journalism is
influenced by the sources’ framework. In addition, “weak signals” which alarm the
potential risk in the future are hard to detect for the journalists because “they[weak
signals] are uncertain and irrational” (2005: 6).
The bankruptcy of Enron and the collapse of ‘the dotcom bubble’ in the United States
are the examples of the business/financial journalism’s failure to alert the potential risks
of those companies’ management style to citizens. Hargreaves introduces the comments
of Richard Lambert, the editor of the Financial Times throughout the nineties which
says “The Enron affair reveals something about the culture of business journalism”.
According to Lambert’s reflection, there are three reasons of the failure to find out the
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problems: too much influence from the big financial institutions which rated Enron
positively, too much concerned with personalities rather than deep analysis, and
companies’ lack of transparency and the strict libel law which protect them (2005: 107).
Longman analyses there are six problems in the business/financial journalism which
allowed Enron’s fraud and the dotcom bubble. Firstly, many business journalists had
little self-consciousness about lack of enthusiasm on business issues. Some journalists
cared about the salaries, and that was why they chose the job. Secondly, those
companies were not only news sources for journalists but also the advertisers.
Business/financial publications were financially supported by advertisers. This would be
the pressure not to criticise them. Thirdly, the journalists did not have enough
knowledge about the business and the skill to analyse companies in terms of their
financial situation. It made them depend on expert sources and fail to have the objective
point of view. Fourthly, the news organisations became a part of conglomeration and
this “many of the biggest business stories involve media companies themselves” (2002:
21). This would affect the lack of neutrality in news selection or judgement of news
value. Fifthly, the rise of public relations was systematically successful to block
journalists to contact with executives directly who were the actual players of the stories.
23
Lastly, the restructuring of news organisation such as lay-offs and cutting the budgets
affected the number of resources to cover the business news. This led to the lack of
enough time for journalists to detect problems.
2-2-4. The Way to Be Independent
When news sources leak journalists the information which is unauthorised, they have
certain intention. In politics, leaking is a tool for government to gain advantage over
opponents and in business/financial journalism as well. According to Sanders, “It
[leaking] is unaccountable and has great potential for manipulation” (2003: 114). This
information is the potential scoop, so journalists tend to leap at it. In order to be
independent, journalists can pursue their own independence from the news sources
through the following actions: verification by other sources, acquisition of document as
evidences, examination, suspicion, and getting the other side of story (2003: 110).
Besides, media organisations have their own code of practice regarding to free gifts,
free trips and other services from the news sources. Why do they set the code? It shows
there are actually many cases for the journalists to be corrupted and manipulated by
their news sources in those ways. Sanders argues the reasons as “such practices can be
24
subtly corrupting, undermining a reporter’s detachment and objectivity, or at least
giving the appearance that they might” (2003: 122).
2-3. Propaganda Model
Based on the discussion about the relationship between journalism and democracy, and
the role of business/financial journalism, “the propaganda model” presented by Herman
and Chomsky provides the guideline to analyse how journalists have pressures and risks
of being manipulated by circumstances. It consists of five “filters” to analyse the media
such as ownership, advertising, limited news sources, flak and anti-communism. With
using these elements, they criticise the media as “they serve to mobilize support for the
special interests that dominate the state and private activity” (1988: xi). Besides, the
media’s action such as “preselection of right-thinking people, internalized
preconceptions”, and self-censorship contribute to the tendency to support the elites’
interests. Klaehn summarises that “the PM [propaganda model] constitutes an
institutional critique of mass media” (2002: 170).
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2-3-1. Ownership
The first one is ownership which has a risk to affect the news selections and the way of
reporting. They argue General Electric and Westinghouse are the examples of the
media’s ownership. Their boards of directors are dominated by corporate and banking
executives and their business gets involved in weapon production. Media became a part
of the business conglomerates. As discussed above, the corporations care about the
shareholders’ return, and there is “market-profit-oriented forces” toward news
organisations (Herman and Chomsky 1988: 14). This pressure is a concern of
objectivity because the ownership has a possibility to intervene to the news contents.
Now, not only GE, but also Walt Disney and AOL-Time Warner become the ownership
of the media organisations and “subsumed journalism inside their larger corporate
cultures”. This means, for example, it becomes harder for the journalist working for
Time to cover the AOL and other Internet business companies without any biases
(Kovach and Rosenstiel 2001: 126).
2-3-2. Advertising
The second filter is advertising. The advertisers can give the media pressure through
26
pulling out their advertisement. Herman and Chomsky discuss the television networks
as “an advertising-based media system will gradually increase advertising time and
marginalize or eliminate altogether programming that has significant public-affairs
content” (1988: 17). Advertisers like the entertainment and want to avoid controversial
and serious programs.
It actually influences media’s situation. According to Kovach and Rosenstiel, “The
bonuses of newsroom executives today are generally based in large part on how much
money their companies make in profit” (2001: 50).
2-3-3. Limited News Sources
The third filter is limited news sources. According to Herman and Chomsky,
“Government and corporate sources also have the great merit of being recognizable and
credible by their status and prestige. This is important to the mass media” (1988: 19). A
limited number of ‘elites’ are recognised to be reliable enough by the media. Klaehn
discusses that “Cited by the corporate media as experts and/or ‘authorized knowers’,
their opinions are often accepted without scrutiny” (2002: 159).
27
Herman and Chomsky also claim that the sources give journalists facilities, advance of
copies of speeches and reports, press conference at the time scheduled to their deadlines,
press releases in understandable languages, and photo opportunities at the press
conferences. Through these actions, sources try to shape the news in their favourable
way.
2-3-4. Flak
The fourth filter is flak, “negative responses to a media statement or program” (Herman
and Chomsky 1988: 26). It can be another pressure to the media, and according to them,
it is related to the growth of market economy. They discuss “Serious flak has increased
in close parallel with business’s growing resentment of media criticism and the
corporate offensive of the 1970s and 1980s” (1988: 26). The powerful such as the White
House and major business firms which can be advertisers can directly give the pressure
to journalists through letters and telephone calls with complaints. It also oppresses them
through complaining to the media’s stockholders or supporting the institutions
financially which can attack the media. Herman summarise the powerful can give
“pressure the media with threats of withdrawal of advertising or TV licenses, libel suits,
and other direct and indirect modes of attack” (2003: 2).
28
2-3-5. Anti-communism
The fifth filter is the anti-communism. Herman and Chomsky analyse “This ideology
helps mobilize the populace against an enemy” and this concept can be used against
people who oppose the elites’ interests (1988: 29). After the collapse of former Soviet
Union, Chomsky still argues the validity of the fifth filter. In 1998, he talks,
“You need something to frighten people with, to prevent them from paying
attention to what’s really happening to them. You have to somehow
engender fear and hatred, to channel the kind of fear and rage –or even just
discontent- that’s being aroused by social and economic conditions”
(Chomsky, cited in Klaehn 2002: 161).
2-3-6. The Model Is Still Applicable
Herman also argues the availability of this model as a whole in post-Cold War days.
“The propaganda model remains a very workable framework for analysing and
understanding the mainstream media – perhaps even more so than 1988” (2003: 13).
According to him, the political and economic change and the rise of communication
industries after nineties devote to increase the applicability of this model.
One reason for him to insist this is because of the increase of the importance of
ownership and advertising. Herman points out the elements which show the significance
of the model such as the decline of public broadcasting, the increase in corporate power,
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globalisation, centralisation of the media organisations through merger and acquisition,
the rise of competition for advertisers, and being incorporated with budget cuts. Besides,
the growth of the public relations industry contributes to journalists’ dependent on
sources and causing flak in a systematic way.
Herman continues “The fifth filter –anticommunist ideology—is possibly weakened by
the collapse of the Soviet Union and global socialism, but this is easily offset by the
greater ideological force of the belief in the ‘miracle of the market (Reagan)’” (2003:
11). Instead of anti-communism, he discusses the adherence of market economy as an
ideology.
2-3-7. Criticism
There are mainly three types of criticism on this model. One is about the lack of study
on the effects. The media has an influential power in society, however “the PM
[propaganda model] takes for granted that media content serves political ends in myriad
ways, but does not study these effects directly” (Klaehn 2002:153). About this, Herman
argues “the propaganda model is about how the media work, not how effective they are”
(2003: 8).
30
The second criticism is to regard this as a conspiracy theory. However, Herman and
Chomsky clearly deny this point with saying “We do not use any kind of ‘conspiracy’
hypothesis to explain mass-media performance”. They emphasise their approach is
close to “a ‘free market’ analysis, with the results largely an outcome of the workings of
market forces” (1988: xii).
The third criticism is that this model fails to take in consideration about journalists’
professionalism and objectivity rules. Herman analyses this point as “professionalism
and objectivity rules are fuzzy and flexible concepts” and professionalism does not
mean to be “an antagonistic movement” against the ownerships of the media (2003: 6).
31
Chapter 3
BACKGROUNDS
As discussed in the previous sections, journalism has a risk to suffer from pressure of its
ownership, advertisers, and sources. This section will present the actual examples of the
problematic aspects of business/financial journalism. The Enron and other similar
business scandals show how difficult the business/financial journalists could detect the
truth. In addition, business/financial journalism has a risk to commit a crime like the
insider dealing, because it can obtain the unreleased information earlier than the public.
The Mirror (the United Kingdom) and Nikkei (Japan) actually faced with this problem.
To regulate themselves, the Press Complaints Commission (PCC) sets the Codes of
Conduct. This insists the importance of the morality and self-regulation, and shows the
potentials for the media to be tempted in many ways.
3-1. The Frauds
3-1-1. Enron
Enron had been the one of the largest natural gas and electric marketer company. It was
32
reported that the annual revenue were more than $ 150 billion. However, Enron actually
had overstated its revenues and assets while Fortune chose it as the one of the “100 Best
Companies to Work for in America”, and number seven on the Fortune 500(Longman
2002, Vasilescu and Russello 2005). Almost all the business/financial journalism had
only played just a part of the bubble, and contributed to many people to be deceived
without detecting the fraud (PS Burton 2002, Uskali 2005).
What Enron had done was self-dealing, “acting on both sides of the deal” (Deakin and
Konzelmann 2003: 9). It had also involved mark-to-market accounting.
“Enron abused mark-to-market accounting to a staggering degree applying
it in ways never intended, such as marking assets to the value of
spreadsheet projections (“mark-to-model”) and to prices set by Enron itself
in markets where Enron was effectively the market-maker (“mark-to-my
value”)” (Stewart 2006: 116).
How was the way of reports in business/financial journalism? For example, The Wall
Street Journal has reported Enron frequently. The following table shows the number of
headlines about Enron in The Wall Street Journal since 1997. This data is the result of
its advanced research on the website. The number of 2006 is the data from 1 January to
30 August except the headlines of law weblog.
33
The Number of Headlines about Enron in The Wall Street Journal
600
511
500
400
300
number
200
178
100
0
19
25
24
67
26
83
125
50
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
(Source: The Wall Street Journal Online)
Until the time when the wrong doing was revealed, most of the articles failed to detect
except the article on 17 October 2001, which wrote about Andrew Fastow, the chief
financial officer at that time “entered into the unusual arrangement with his employer”
and “It isn’t clear from Enron filings with the Securities and Exchange Commission
what Enron received in return for providing these assets and shares”2. The time this
article was written was right after the announcement of the third quarter loss. The Wall
Street Journal reported Enron’s $1.01 billion charge connected with write-downs of
investments, and warned “the risks the onetime highflier has taken in transforming itself
from a pipeline company into a behemoth that trades everything from electricity to
2
http://online.wsj.com/PA2VJBNA4R/article_print/SB1003237924744857040.html. This article is
available to read on the website for the registers only.
34
weather futures”. After this, many rating companies like Moody’s Investor Service
downgraded Enron’s long-term debt. The value of Enron’s stock sharply declined, and
on 2 December 2001, Enron declared bankruptcy.
According to Carson, “executives could conceivably have believed that the sort of fraud
and deception they practiced promoted the interests of shareholders” (2003: 392). Enron
had especially focused on earnings per share (EPS). Stewart introduces the message
from the former Enron chairman Ken Lay and the former Chief Executive Officer Jeff
Skilling in the letter to shareholders as “Enron is laser-focused on EPS, and we expect
to continue strong earnings performance” (2006: 116). They had been feeling the
pressure from shareholders who had required a much higher return to ensure the
compensation for their investment.
3-1-2. WorldCom and Livedoor
The fraud of WorldCom is similar with Enron case. WorldCom overstated the income,
and misled investors. The US Securities and Exchange Commission (SEC) alleged that
“WorldCom, led by Chief Executive Officer (CEO) Bernie Ebbers, misled investors
from at least as early as 1999 through the first quarter of 2002” (Vasilescu and Russello
35
2005: 4). In July 2002, WorldCom entered bankruptcy. Carson summarises “the Enron
and WorldCom cases highlight some serious problems with rosy view of laissez faire
capitalism endorsed by many defenders of capitalism and the shareholder theory”
(2003: 392).
The case of Livedoor, a Japanese internet company, is also similar with Enron and
WorldCom. According to the Financial Times, the executives were arrested in January
2006 because of “suspicions of accounting fraud and market manipulation” (Nakamoto
and Lucas 2006).3
3-1-3. The Sarbanes-Oxley Act
The Sarbanes – Oxley Act was signed into law in 2002. It is to protect the investors by
improving the accuracy and reliability of corporate disclosure. This act is created based
on the reflection of Enron’s fraud. It established the Public Company Accounting
Oversight Board, which oversee the public companies’ auditors for fairness and
independent audit reports. According to Vasilescu and Russello, “prosecutors provided
the DOJ [the US Justice Department] and the SEC [the US Securities and Exchange
3
The article is the Financial Times. URL:
http://search.ft.com/searchArticle?page=3&queryText=takafumi+horie+arrested&javascriptEnabled
=true&id=060123008023
36
Commission] with powerful tools to pursue corporate misconduct” (2005:7). For
example, it “provided for new crimes for securities fraud and conspiracy to commit
securities fraud” (2005: 8).
Senator Paul Sarbanes, one of the authors of this act, describes this on his website as
“The legislation creates a strong independent oversight board to oversee the auditors of
public companies and enables the board to set accounting standards, and investigate and
discipline accountants”4.
3-2. Cases of Insider Trading in News Organisations
3-2-1. The Mirror
In 2000, the Press Complaints Commission (PCC) condemned two columnists and one
editor of The Mirror for their financial actions (Sanders 2000: 124). Anil Bhoyrul and
James Hipwell were the columnists of ‘City Slicker’ of The Mirror, and they purchased
shares which they featured in their column. According to the BBC reports (2005, 2006),
Bhoyrul pleaded guilty and was punished a one hundred eighty-hour work for the
4
This line is from the website of Paul Sarbanes. URL:
Sarbaneshttp://www.senate.gov/~sarbanes/pages/biography_2004.html
37
benefit of the community, and Hipwell was found “guilty of conspiracy to breach the
Financial Services Act”. Hipwell was jailed for stock market abuse in February 2006
(Hipwell 2006)5.
Moreover, Piers Morgan, the editor at that time, also bought shares that had been tipped
by these columnists. He confesses it in his dairy book, ‘The Insider’ as follows:
“MONDAY, 17 JANUARY
I’ve been dabbling a bit in the stock market and bought shares today in a
company called Viglen Technology, one of Alan Sugar’s companies. Our
‘City Slicker’ columnists, Anil Bhoyrul and James Hipwell, have tipped
them several times since the start of the year, and both my broker and my
uncle have also recommended them to me recently, so they sound a good
bet” (2005:249).
He does not seem to have any ethical guilty feelings at this moment. However, he writes
his restless feelings a few days later.
“SUNDAY, 23 JANUARY
A small piece appeared in the Sunday Business Newspaper today saying
the Financial Services Authority were having a look at trading in Viglen
shares to see if anyone had been ‘insider dealing’. It leapt off the page. I
am now seriously uneasy. I was a bloody fool to be buying shares without
checking what they were tipping in their column” (2005: 250).
The PCC summarises that Morgan’s and two columnists’ behaviour as “serious breaches
5
URL: http://media.guardian.co.uk/presspublishing/story/0,,1718726,00.html
38
of financial journalism provisions of the Code of Practice” and “Mr Morgan had not
taken sufficient care to ensure that his staff were acting in accordance with the Code”.
6
In the investigation of the PCC, Morgan’s amounts of purchase were reported as 20,000
pounds. However, in 2005, during Hipwell’s trial, it was revealed as 67,000 pounds. In
2006, a former editor of The Mirror, Roy Greenslade requested to reopen the
Commission and the reassessment. He assumed that the Trinity Mirror management
“had conspired to give false evidence to the Commission” even though he had told the
total cost as 67.000 pounds. The PCC confirmed the company and concluded it could
not find the evidences to suggest the conspiracy to present the false information to the
Commission. In addition, it recognised that the value of the shares was irrelevant to this
matter. As a conclusion, the PCC criticised the company that “non-disclosure affected
the integrity of the PCC’s work” and The Mirror’s case is “Serious breaches of the Code
of Practice” ( The PCC 2006).
3-2-2. Nikkei
In Japan, one employee in advertising section of Nihon Keizai Shimbun, Inc. (Nikkei)
6
The URL: http://www.pcc.org.uk/news/index.html?article=MzkyNA==
39
arrested because of insider trading by accessing the companies’ data for its
advertisement (AFX 2006). In July 2006, this person was arrested by the Tokyo District
Public Prosecutors Office on suspicion of insider trading. This employee made his
profits by accessing buying the shares of five companies which brought Nikkei their
unpublished legal notifications as advertisers. The information should be kept as
confidential. Nikkei told employees in the editorial, advertising and sales bureaus to stop
trading in stocks.
3-2-3. Codes of Conduct
There is one independent organisation called the Press Complaints Commission (PCC)
in the United Kingdom. It sets the code of conduct which “attempt to encourage or
enforce ethical standards in the media” (Welsh et al. 2005: 381), specifically all national
and regional newspapers and magazines. It is a self-regulation guideline for journalists.
The latest version of PCC’s codes of practice was ratified in August 2006.
Clause 13 of the codes is about the ‘financial journalism’, and it has three guidelines.
Firstly, it is about the dishonest use of the information for the journalists’ profit.
Journalists must not use the financial information receiving through their activity for
40
their own profit “even where the law does not prohibit it”. Secondly, it is about the
disclosure of journalists’ own financial interest in case of writing. They must not write
about the companies’ shares or securities which they or their families have an interest
without telling the interest to the editor. Lastly, they must not deal with the companies’
shares or securities which they are going to cover or recently covered (see the
Appendix).
41
Chapter 4
METHODOLOGY
As Bakan describes, “Elements of Anglo-American model also increasingly shape its
counterparts in other countries, especially in European nations and Japan” (2004:3).
Therefore, this paper mainly focuses on the situation of the business/financial
journalism in the United Kingdom and Japan.
This research applies the data gathering approach through a series of interviews and
questionnaire. By doing them, the researcher expects to have the ideas and insights of
what happens in the communication between journalists and news sources in reality.
The interviewees were selected from both sides: journalists (including freelance
journalist and ex-journalist) and the public relations people such as the PR agencies and
the in-house corporation PR people. This study has twelve interviews with journalists
and PR people, and one questionnaire answer from a Japanese corporation in total.
In order to have the realistic point of view about the financial/business journalism
broadly, the researcher had tried to contact not only to the journalists in newspapers, but
42
also to the people in broadcasting, newswires, magazines, web news and freelance. In
addition, he offers the interviews with the corporations which have the in-house PR
team and the PR agencies, and the non-governmental organisation which watchdogs the
corporations’ behaviour as well. The interviewees are British, American and Japanese,
who are the people of economically leading countries and financial/business journalism
has been developed. All journalists who accepted the researcher’s interview have more
than five years’ experience in journalism.
4-1. Interviews
The interviews were held from June to August 2006. Six interviews with the people who
are in the United Kingdom were basically carried out at their office in London or Leeds
during their business hours. The discussion was with open ended questions which allow
the interviewees to answer as much as they want. In addition, the face to face
communications brought the relaxed atmosphere rather than phone conversations or
emails. The entire discussions were recorded with the interviewees’ permission to avoid
misunderstanding of what the interviewees answer. They were transcribed afterwards.
In the case of the interviews with Japanese journalists or journalists who stay in Japan,
43
most of the interviews were carried out over the phone with open ended questions
during weekends when they were at home. The discussions were not recorded because
of the difficulty to record the phone conversation, so the researcher wrote the
conversation down to his notebook.
In sum, the journalists (including retired ones) who accept the researcher’s offer works
for the Financial Times, Bloomberg, the Yorkshire Evening Post, the Business Week,
Nihon Keizai Shimbun (Nikkei), and the Economist (Japan). In addition, one reporter
accepted the interview under the condition to be anonymous both name and organisation.
The PR agency which accepted this interview was Weber Shandwick (London).
4-2. Questionnaires
The questionnaire for Japanese companies was written in Japanese, and the answer was
as well. The questions allow the open discussion, not like yes-no answers. The list of
questions was sent through email, and the answer came through email. The answer was
one in total from a Japanese mobile phone company, NTT Docomo. The questions for
the journalists asked about their thoughts and opinions about the relationship between
44
their news sources and them. One of the main points was the case when their news
source complained about their article or report. How did they deal with the complaints,
and how did they act without cutting the relationship off. The interviews were carried
out as the style of free conversation.
4-3. Limitations and Difficulties
At the beginning of the contact to the media organisations or the corporations which
have their own PR team, the researcher called to the office and got the suitable person’s
email address. However, it usually happened that most of news organisations did not
reply to the offer emails such as the Guardian, the British Broadcasting Corporation
and the like. The researcher needed to keep calling them to ask the availability to have
an interview with the right person, and it took much of time. In order to have neutral
point of view, the researcher had approached to the non-governmental organisation
Which?, and it replied to accept the offer once. However, there has been no reply to the
questionnaire. In addition, the corporations such as Sony Corporation, Matsushita
Electric Industrial Corporation, and Toyota Motor Corporation answered they were not
able to answer any questions because of their policy.
45
Chapter 5
FINDINGS THROUGH INTERVIEWS
5-1. Role of Business/Financial Journalism
In reality, how do business/financial journalists recognise their role in society? A
Japanese journalist for Nikkei, Naoko Miyashita talks as follows:
“The articles done by business/financial journalists are completely
different from companies’ website information or the financial analysts’
reports. Our role is to classify and present the meaningful information to
the citizens through our own criteria. For example, companies’ websites
are just the information of their points of view. The financial analysts are
just the business persons who always try to sell their clients the profitable
stocks. They just care about the investors only”7.
An experienced journalist of Bloomberg says “The role [of business/financial
journalism] is the same [as other conventional journalism]. We are writing for investors,
but we are trying to be as transparent as possible. We are trying to make business
transparent”.
Those journalists care about their own audience and feel their responsibility to report
7
Interview was in Japanese. Words were translated by the researcher.
46
the information to the audience with scrutinising it. However, it is necessary to examine
that their audience is different from other conventional media. A sixteen-year career
journalist, Dan Bogler, a managing editor of the Financial Times, discusses that its
audience have specific interests to read it. In other words, his audience is more active to
obtain the business/financial information than other media’s audience.
“I mean this is the best in the world and I love the Financial Times, but this
is not for the paper you read for fun, you know. This is a difficult paper to
read, you know, it’s technical, it’s detailed, it’s heavy and you don’t find
the things about the Big Brother or, you know, the loyal family or whatever
in the end. You read this usually because you have to, because it affects
your business in your life”.
According to Bogler, the audience of Financial Times has four categories: (1)decision
makers in the area of political, business, economic things such as chief executives and
all those in senior management groups (2)politicians, central bank and people in the
bank business, people in the think tanks, analyst of investment banks, and economic
professors (3)professional investors such as hedge fund and other fund managers
(4)retail investors (uniquely in the United Kingdom).
A journalist of Bloomberg also talks about its audience with using the term ‘clients’ as
follows:
“[O]ur clients are making multi million dollars decisions based on our
47
stories. They are trading on our headlines and our stories… By clients, I
mean the investors, those clients who demand, who are CEOs and CFOs
and central bankers and they want very specific, accurate, very specific
information not general information”
On the other hand, the general newspaper does not care about the investors much in
depth even though it has business/financial pages. A business editor of Yorkshire
Evening Post, Nigel Scott discusses that his audience is different from other
business/financial journalism because of the difference of the editorial philosophy. His
newspaper is a tabloid newspaper. He cares about the interests of the people in
Yorkshire in terms of economic issues.
“Evening Post business is a lot more for people who aren’t necessarily in
the world of business, and they may be just workers rather than the
boardroom people, but who have an interest in what’s going on the local
business world, so that’s the sort of we write for… We are very much a
tabloid paper. In terms of the philosophy of the paper, it’s more for the sort
of the common man in the streets as it were, the general readership”
William Dawkins, a partner of Odgers Ray and Berndtson, who has a twenty-three year
career as a journalist at the Financial Times, points out “the Financial Times is not the
general newspaper” and its role in society is “very different” from the other general
journalism. The audience are the business elites who make the influential decisions to
the world. However, it does not mean that the business/financial journalism is only for
48
the limited number of high class people in society. Dawkins explains that its role is
“very important” because the nature of business affects society as a whole.
S)A good business press is an important part of successful economy. The
US has great business newspapers. Same as Britain, same as Japan.
Business people use these newspapers to help and make judgements.
I) They are doing their own business with using that kind of information.
S)Yes. And these are the people who hire, who provide jobs for hundreds
of thousands of people who pump wealth back into the economy. It’s very
important to the well being of these countries. They perform well in their
work. Business newspapers are more helpful if they are doing their jobs
properly.
(S: William Dawkins, I: the researcher)
What kind of news do they try to get? Bogler provides the definition of his scoops as
“something that the company doesn’t want them to know” and the information comes
“from competitor, or from an analysts, or from a supplier, or customer or something or
someone inside of the company, but not maybe the management”.
According to a journalist of Bloomberg, Merger and Acquisition, some executive’s
promotion or resignation, and the company’s decision to open the new factory are the
examples of scoops. In addition, Scott talks that the negative stories such as company’s
corruption and other wrong doings are the scoops:
“Obviously, you have got yourself through your contacts, your networking,
your digging, that is something that everybody will want to read about that
49
it has the great impact on the city, uh… that may expose corruption, or
wrong doing, you know.., it’s a good story that you got through your own
talent and efforts, and contacts, nobody else has got but everybody wants
to read and everybody will follow the next days”.
On the other hand, one role of journalism is to take the voiceless people’s voice. How
does he think of this point? Dawkins talks that the business/financial journalism is not
for the weak but for the influential class toward the weak. “The business press is to help
business people and financial people make judgements” and “it’s not the voice of the
people, not at all”.
Writing articles for the “limited” audience sometimes make them cynical to their job.
For example, one equities reporter working for a large international news organisation
confesses that her reports just contribute to the participants of the market.
“Most of my articles are about what the companies have done and it is just
like for the other people’s profitability. It is true that I can learn something
through my job, and that is good for me but I am just feeling that this is not
for the life-time job. I cannot deny the possibility to be interested in more
meaningful jobs [for the ordinary citizens], for example the editor of a non
governmental organisation’s publication or something”.8
For example, when “company A” which is a public corporation leaks some information
8
The interview was carried out in Japanese. Words were translated by the researcher.
50
to a journalist exclusively, the story will be published as a scoop through the
examination by the journalist. After the publication of the article, the stock price of the
company A will sharply move. In this context, this journalist contributes to the market.
The problem is the case that the leaker of company A has an intention to affect the stock
price in his or her favourable way by leaking a story to the journalist. In other words,
journalists have a risk to be used to control the stock prices by their news sources.
However, some interviewees accept their role as participants in the market, and they
understand it is impossible to stop the fluctuation of the stock market. Scott says “[Y]ou
got the scoop and your article is read and respected, so you are winning. You are doing
the right thing, I think. Because you can’t control the market but if it’s good information,
then it’s your duty almost, isn’t it? To be reported”. Dawkins also talks “you [a
business/financial journalist] are the part of the market”, and “it’s a very good thing”.
S)You’re publishing information that it’s got to be published anyway. It’s
not the newspaper is not driving the stock prices up. Good business press is
the part of the market its way of distributing the information
I) So it’s not a bad thing to be a participant of the market or contribute to
the market.
S) That’s a very good thing because it improves the quality of the market.
Good business press is a part of good part of market economy
(S: William Dawkins, I: the researcher)
51
The spread of the Internet changes the audience. Masahide Inatome, a Japanese
journalist for the magazine, Weekly Economist, notices that the audience is smarter than
journalists and want to have the quick information to scrutinise by itself:
“It is sad to say this, but I feel that the people in Japan do not need the
journalistic point of view anymore. People are getting to need the
information speedy in a convenient way. It is obvious to see the sales of
magazines. Because of the Internet, and people can collect and judge the
useful information by themselves. They do not need the editorial columns
or the journalistic points of view anymore”. 9
On this matter, Dawkins has a different point of view. He agrees that the audience is
smarter than before, but the role “to shine the light through the storm” is still significant.
According to him, the interpretation and the presentation of in-depth analysis by the
journalists are necessary because the information is overloaded.
“[T]he value of analysis is much greater than it was. We do business in the
world. The major companies are competing with each other with access to
the same information everybody’s, same technology, and the finance, the
same cost, which means the best way for that getting competitive parties
can differentiate from the rivals is to be able to foretell the future, that
means being able to interpret the data all around”.
In summary, the role of business/financial journalism is nearly the same as other
journalism to report the things for citizens, but one big difference is that it is not for the
9
The interview was carried out in Japanese. Words were translated by the researcher.
52
voiceless people’s voice. This point stems from its audience. The audience is “business
elites” such as the investors, the bankers, and other economic people. It is indispensable
to affect the stock markets through the reports, and it is good for society. In the Internet
era, the role to present the interpretation and in-depth analysis is required to guide
citizens to the right way.
5-2.The Problems in Reality
5-2-1. Narrow Angles
Joanna Blythman, a freelance journalist, criticises the business/financial journalists love
the topic such as the profitability and the stock markets too much, and their interests are
too narrow.
“I think the business/financial journalists tend to focus on things in a
narrow angle. They are talking about the success of profitability, and don’t
look at the companies’ social impact carefully. For example, [the issues
like] environment, quality of life etc.”10
She suggests that the business/financial media should hire the people whose
backgrounds are different from the business/financial area because it allows to bring
10
This interview was carried out over the telephone without recording.
53
broad angles.
In fact, the actual business/financial journalist also wonders the problem of narrow
angle. A thirteen-year career journalist for Nikkei, Mitsutoshi Kouta has doubts if it is a
right way to focus on profit mainly when he reports something about companies.
“I do not have any intention to cheer up my news sources, but I am not
sure if it is right to emphasise the deficit of the companies which I cover.
For example, when a small sized pharmaceutical company announces their
deficit, which is because of the investment to develop a new medicine. The
investment is necessary for them to grow in a long term. I feel it is not
enough to see the profit to judge the companies reliability”.11
Dawkins says it is necessary for the journalists to have a “big picture” on every issue.
“Business journalism should look for the big picture. Business journalism
should not be just about finance and business. It should explain how
business and society affect each other. They should place business in the
contexts of society. If you failed to do that, if you are too financial then
you just become stock market newspaper. The problem, business
newspaper does what business has done which is if you face with how
financial and business events affect the people behave, how they affect the
markets”.
For example, about the case of the terrorists’ plot in London in 2006. What does the
business/financial journalism need to have as a news angle? Dawkins says it is “too
financial” to report like “airline share went down yesterday because of the terrorist
11
The interview was carried out in Japanese. The researcher translates his comments into English.
54
threat”. It is necessary to have a “right balance” between economic impact and
humanity.
5-2-2. Lack of Knowledge
Dawkins also talks that the journalists tend to be manipulated because of the lack of
knowledge and sees these cases in reports “all the time”. He argues the lack of
knowledge is “the constant risk” for the business/financial media and says “Junior and
inexpert reporter will fail to understand the story, because they will simply write down
what they hear from the experts and be unable to exercise their judgement”. To avoid
the risk, it is significant to train the journalists to increase their intellectual level. In
addition, it is important to scrutinise the articles before publishing on the newspaper.
This means, the editors are necessary to be expert as well.
5-2-3. Editors and Journalists Relationships
Some interviewees talks about the imbalance of knowledge between journalists and
editors as a problem, because it causes the judgement of news value. Kouta talks about
the editor’s lack of knowledge on the particular industry.
“For example, when a company started to develop a cure for AIDS, I tried
to write the article about it. However, the editor told me ‘I don’t understand.
Do you think it is legitimate to put the article like this which has a
possibility to fail?’ I would like to write this type of company’s news more,
55
but the editors do not accept my opinion in general”.12
Dawkins has an experience both as a correspondent and as an editor at the Financial
Times, and says the editors’ job should be “to assess the relative merit of the story” and
journalists should “be good enough to give the story that is basically right”. In addition,
it is right for the editors to say their disagreement with the journalists’ opinion.
“They are both journalists, ok? Editors are journalists, too. In this [type of
conflict between journalists and editors] case, the reporter should well
enough informed to make the case for the story. Reporter should be the
expert. He should tell the editor. You have to make the argument. The story
is important for the following three reasons. You should sell or inform and
the editor might say ‘ok, I understand your following three reasons and
they are correct. But I still think your story is not important because we’ve
got something else which is more important. But it shouldn’t [be] the
questions of the foundation of the story’”
Based on the experience as an editor, Dawkins talks the difficulty to spot the trend and
judge the value of the story. He also mentions the tendency that the reports become
similar with the other media, because the editors care about the competitors’ headlines
too much.
“It’s very easy to… follow the crowd. One problem that you’ve got the big
story like the terrorist threat in London yesterday, you think to yourself and
‘well, everybody else is going to put that on the front page, so I will, too’
(laughter)”13.
12
13
The interview was carried out in Japanese. The researcher translates it into English.
The interview was carried out on 11 August, the next day of the terrorism plot in London.
56
5-2-4. Concerns on Regulations
The legal restrictions make journalists’ activities hard. Miyashita describes about the
influence of the regulation related to the stock market. When she tries to talk to the
people in companies in order to get news, she notices that they hesitate to tell the
detailed information about future plans or strategies before the announcement. She says
“The people in companies are getting to be sensitive these days because of the incidents
of the insider dealing problems and the stock market’s guidance for the companies to
control their information firmly. It is getting hard to get scoops”.14
In addition, a journalist of Bloomberg also describes the influence of the Public
Company Accounting Reform and Investor Protection Act of 2002 (which is also known
as ‘The Sarbanes – Oxley Act’) in the United States, however it is little impact to the
business/financial journalism.
S) “We were very afraid when the Serbanes – Oxley registration went
through in America, that we would not get access to the more information
because the SCC rules are getting very strict”.
I) Yes, because of Enron, Livedoor…
S) “Yeah, Enron. And Livedoor now. But actually it hasn’t had any real
impact on this, getting the news. It doesn’t seem to”.
I) It’s not difficult?
S) “It’s actually not more difficult. We thought it would be but it has not
been so, um, people still leak news”.
14
The interview was carried out in Japanese. The researcher translates it into English.
57
(S: a journalist of Bloomberg, I: the researcher)
He also indicates some regulation is necessary. For example, regulation which
encourages disclosing will be significant for the next five years. Without it, lack of
transparency will block the activity of business/financial journalism.
“I do think, I suppose globally in the future, we will be dealing more with,
say Chinese companies, Eastern European companies, Middle Eastern
companies, and some Russian companies, and until now have not be
needed to be transparent and suddenly they have been told ‘oh you have to
release any and tell people’ and they haven’t had shareholders so they
don’t understand”.
5-2-5. Routine
When the number of journalists is less than the amount of pages to fill in, the journalists
feel pressure to collect information to write as news. Inatome who had once worked for
Nikkei and Bloomberg points out this as a problem because it is easy to create the
situation that the journalists can rely on them.
“On the one hand, the start-up companies or the venture business people
especially use Nikkei as a tool or the media for free advertisement to raise
money for their business through giving new information. On the other
hand, the journalists of Nikkei have a routine to fill the pages with articles
so they tend to jump at the new information from those companies. They
never refuse to write the information as news because of this pressure”.15
15
This comment comes through an email written in Japanese. The researcher translate this into
English.
58
Once the article about the company’s business information is published, there will be a
possibility to increase the investment toward the company. The journalists are also
happy to have the information because they can fill the pages. This type of routine
makes a journalist embarrassed. Miyashita says “Everything at my workplace is about
the supply and the demand”. She has been asked to write something on the pages to fill
in even though she judges it is not newsworthy.
In addition, the routine may grab the chances to get scoops more from the journalists,
because they cannot concentrate on building their own networks to obtain information
and scrutinising certain issues which they are interested in. Scott confesses “I wouldn’t
have the time really” to investigate something because of his routines to fill pages.
“I think you just have to realise you can’t, you know. You have to know
where your limitation is, and so, if it would something that needed a lot of
research, I will have to ask somebody else to maybe take it all and [be]
getting involved of it, because my priority, number one priority is to fill
these pages, that’s my number one, you know, what I’m told I have to do”.
5-2-6. Unfairness
Kazuyuki Sasaki, the chief editor of IT Media, a Japanese Internet website which
59
provides the news on the areas of information technologies talks about the unfairness in
terms of the competition with other media to get scoops. In other words, there is a
monopoly of one particular business/financial media, and this creates the lack of fair
competition to get information from the companies exclusively.
“I don’t think it is fair. The companies always leak some information to the
business/financial media like Nikkei before the official announcement. I
can see the flow which starts the exclusive article on Nikkei and the
company officially announces the fact later. The companies generally
understand the impact of Nikkei’s articles after they leak the information. I
am not saying this flow of information violates something, but I don’t
think it is healthy situation”.16
5-3. The Reason Why Business/Financial Journalism Failed to Detect
The Frauds such as Enron and WorldCom
Enron and World Com are the problem on disclosure. Why business/financial
journalism could not detect this and failed to warn the public before the things
happened? Bogler points out that the journalists were “too uncritical”. The people in
Enron or World Com “wanted to cheat” the journalists. However, he also admits that “it
is difficult” to detect this type of fraud. Dawkins says the governance of Enron was
“superb”, so it is significant to keep asking the basic questions.
16
The comments were in Japanese. Translation into English was done by the researcher.
60
S) “In fact, the best way to conceal of fraud is to run the company that
appears to be very well governed. That was the case of Enron. The
governance standard of Enron was superb”
I) How do you think about the financial journalism role at that time?
S) “Poor. It was poor. Nobody detected it. No financial newspapers stood
back and asked the basic questions. The standard of reporting was weak”.
(S: William Dawkins, I: the researcher)
Dawkins also emphasises that “Risk is a part of the capitalism and it’s a part of the
service of the good journalist to detect risk. Just point it out. You don’t need big
judgement, just reported”. The corporations have nature to commit to risks even though
there are legal restrictions.
S) “It always happens these days. Risk is the part of the capitalism system.
If you don’t take risk you cannot make profits, you cannot make business”.
I) That’s how it goes.
S) “Yes. Now, the government tries to compensate for that. I, putting in
place strong rules of governance. But however the strong your governance
rules are, companies will take risks, and people will sometimes be
dishonest, however good your rules are, frauds will happen. And it is
always getting to be impossible for those to detect well organised or
conceal the fraud.
In addition to the frauds, business/financial journalism tend to ride on the trend without
in-depth scrutiny. Dawkins talks about the ‘New Economy’ in the United States as the
example. He insists the necessity to have courage to warn the public.
“How many people wrote the height of the Internet bubble? That… A large
number of these companies is going to go bust so that basic rules of the
business that you must make profit survive. We’ll still the same. People
were writing a lot of rubbish about the new economy, and how the digital
61
world reinvents our business. It was all rubbish. How many people have
the courage, stand up and say, ‘well… these businesses is not going to
make a profit’ and they collapsed, aren’t they?”
5-4. Power of PR
Another problem is the rise of in-house PR department and PR industry. The PR
provides only one side of the story which is favourable for the companies. One
Tokyo-based equities reporter for a large international news organisation talks that the
PR people have a huge power to allow the journalists to have interviews with
executives.
S) “Now, the public relations have a power much more than journalists. We
cannot write anything until we can confirm it, and when the PRs deny the
information which I get, I cannot write it soon. In addition, there are as
many news organisations as the PRs like”.
I) Can you talk to the executives or the people in management team
directly?
S) “They never tell the telephone number at all. They never accept the
private meeting in their houses. I maybe not aggressive but I am thinking
that there is no way to win the race with other big business/financial news
organisations”.
(S: the reporter , I: the researcher)
Scott points out that “it’s not easy when I have to fill all this space. I ‘m very reliant on
PR companies, [which are] telling me things. Now they are all putting a spin on it”. At
62
that same time, he also understands what the PR people do not bring to him.
“What you don’t find, of course, from PR companies, what you don’t get is
the negative stories. They never tell you when the company is sucking
people, laying people off, they never tell you when the company is in
trouble financially, so you have to use your a lot of contacts for that”.
A journalist of Bloomberg points out that the inexperienced reporters have a risk to
suffer from pressure from the people in the PRs.
“It’s always the danger for young reporters that they are reporting for the
sources. So we are always telling the people, ‘you are writing for five
billion people in the world. You’re not writing for the PR guy or that
company’. You know. But it’s hard to stand back because of course the
pressure from the companies”.
Tali Kramer, an account Director of Weber Shandwick actually says she will
avoid to contact with the journalist who writes the bad article “because it’s no
worth it”. She says her job is to “bear to get no negative coverage”.
5-5. Business aspects of news organisation
Based on the propaganda model, ownership and advertising are the elements of the
media’s characteristics. For example, the business pages of Yorkshire Evening Post are
financially supported by the Yorkshire Forward, the regional development agency. On
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the top of the page, there is a logo mark of Yorkshire Forward with the words “in
association with”. Scott explains “it [Yorkshire Forward] has public money, but it is not
run by government” and “they’re using money to support business growth, to support
entrepreneurs, to promote Yorkshire internationally to attracting the investment”. He
recognises “it’s good revenue for the newspaper and it helps to give a particular
credibility to our pages as well that we have that sponsorship”. How does he keep the
objectivity?
“The objectivity, that’s very difficult because we write a lot of things about
Yorkshire Forward. But we will never not criticise them if we feel we are
aware of criticism. The agreement is quite unbreakable. That sponsorship
does not affect our journalistic independence anyway so I am quite to run
stories about Yorkshire Forward doing good things but that is not because
of they are sponsoring page, that’s because the stories worth it on news
values”.
The owner of the Financial Times is Pearson. Bogler admits the importance of
profitability as a news organisation. On the other hand, he emphasises “there is huge
‘Chinese Wall’ between the commercial side and the editorial side”. This means, there is
“no interference” of the ownership or other sponsorship. Dawkins talks about this in
detail.
“On the FT, our owner is Pearson, never intervened in what was written on
the paper. It was completely unacceptable to do that. They were very good
about it. They never did it. And there was a very clear division between the
64
editorial department and the advertisement department. The editorial staffs
were never told what the announcement is going in the paper on that day.
They didn’t know who they were the advertisers”.
5.6 The Way to Avoid The Manipulation from The Sources
As the propaganda model shows, there are pressures to the media such as ownership,
advertising, limited sources, flak, and anti-ideology. How do the business/financial
journalists tackle to these pressures? The interviewees talk about the importance of
education for journalists, judgement of news value through multiple news sources,
transparent way of reporting, firm attitude toward the complaints, and codes of practice
as self-regulation.
5-6-1. Education
Dawkins emphasises “it is critical that you are properly trained”. No education system
may create the low quality of the reports which allows the key news sources and the
intelligent readers to leave.
S) “The FT invests a huge amount of training. They sent me to business
school in Insead in order to learn management. When I went to Japan, I
stop to work four months to try to learn the language”.
I) To understand what they are talking about?
S)“Exactly. This is normal. They teach journalists accountancy, financial
65
reporting, balance sheets. The FT puts a huge amount of money into
training its journalists and raising their intellectual standard all the time
because that is the future of their journalism”.
(S: Will Dawkins, I: the researcher)
Bogler also explains about the in-house training programs at the Financial Times:
“We have journalists teaching each other, so for example people teach
classes. For example, I teach a class on valuation, sometimes how to value
companies, you know, everything… how to value companies starting with
dividends and P/E ratios do you know what I mean? Then going to more
complicated things discount cash flow…or that’s it…how to see the cash
flow, how to analyse the cash flow, how to do.., you know. And net present
value. So I teach that sometimes, and I teach accounting and then many
other of my colleagues teach these things. And then also, we have external
trainers coming in, and teaching things”.
According to him, there are two recruitment programs which intend to obtain the
experts. One is “graduate recruitment program”, to recruit the students in practical
journalism course in university or media organisations and put them in the several
sections at the Financial Times for two years. The other is the program to recruit the
experienced persons in journalism or financial industries such as “an investment banker,
an analyst, and fund manager”. These programs intend to set the intelligent level of the
Financial Times high to be critical to business/financial issues.
66
5-6-2. Multiple sources
In order to be accurate and able to think critically, the Financial Times requires the
journalists to have at least two independent sources when they write a story as a scoop.
Bogler says “We have a system where if you can get two sources, three is better, but if
you have two independent sources that both is telling the same thing, then you can write
a story”.
As examined the previous section, it is very difficult for the journalists to obtain the
negative stories. How do they tackle to this difficulty? Scott says “you have to have
your own contacts”, and he tries to visit the events like conventions and build his own
network. According to Dawkins, the journalists need to be trained “through reading,
experience, knowledge, constant questioning to the expert sources, moral courage [and]
having the ability to say nobody wants to hear”.
He continues, “if the information is new or in question, you should have at least two
other sources”. For example, “one company is taking over another, you have to talk to
both”. For example, the case like company A tries to takeover company B, and the
journalist gets this information from company A, he/she is necessary to talk to company
67
B. According to him, as a tactic to be accurate and not to be manipulated by the source,
the journalist should ask to the leaker saying “can I talk to company B about it?” The
person says no, the journalist should not make any action.
However, this process seems to be reliant on the news source’s initiative. Dawkins says
“you get the limits. You have to be independent. But you’ve got to behave with
complete integrity”. To pursue what he talks, he suggests asking to oneself if it is good
to report when he/she starts reporting.
“Imagine you are going to explain to your father or your mother, what your
work has done. Would you feel happy about it? If you don’t feel happy,
then something is wrong. Or, if the way you behave is reported on your
newspaper, I reported a takeover, company A to company B in the
following way, you know, I didn’t talk to anybody, I didn’t check, would
you be happy about that the answer is no, then you don’t do it”.
When he was a journalist for the Financial Times, he got a scoop about the French
government’s plan to launch the restructuring of its semi-conductor industry. His news
source was the French Industrial Minister at that time.
“I had a talk to half a dozen of very senior people get their response to
really fast get it in the paper. What I did is I send all those story and I
thought, when I’ve got it and thought story was really amazing, so went
back to my original source who is the industry minister of France at that
time, told them what I am planning to write and say look, do you really
mean this? How would you feel if it exists in the newspaper tomorrow’?,
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do you really want me to publish this? Then he said ‘yes go ahead’.
And…we’ve got it.
5-6-3. Transparency in Reports
A journalist of Bloomberg suggests the new style of the article structure in reporting, the
‘Bloomberg way’. It has four paragraphs in each story, which consists of lead, key
quotations, detailed information of the issues, and the big picture. This style is created
to show the investors the reason why they need to care about the news. He explains
“Every story must say, ‘what does this news mean?’, ‘what does this news show?’, ‘why
should I care about this news?’ Every story must have these in the first four paragraphs,
if it doesn’t, we can’t, we won’t print it”.
He also adds, “We always bring in a first four paragraphs, winners and losers. Who is
wining, and who is losing”. It is actually hard for the journalists to find out who is the
winner/loser in a short time. A journalist of Bloomberg talks that they need to call to
analysts, fund managers, and economists who “should know” about it.
Besides, there is another rule for the Bloomberg journalists to tell the name of news
sources in every report. Transparency of the news source is important at Bloomberg.
69
S)At Bloomberg we feel more extremely transparent. At Bloomberg you
cannot have a quote without a name of ...
I) Yes, I know
S) So that is quite hard. You know, the English newspapers will say,
Financial times will say ‘it has been reported that’ or ‘it is reported that’
without any sources, no attribution, you don’t know where do that news
come from. Where do this…is it made up or is this some secret guy calling
on the telephone?
I) Or creation?
S) Creation.. yes, but you can’t do that at the Bloomberg. It’s impossible.
You get fired immediately, uh, but more than that, we would not run the
story”.
(S: A journalist of Bloomberg, I: the researcher)
This style of reporting requires the news source to take responsibility to tell information.
In other words, Bloomberg gives the source pressure. This is the way to protect the
journalists from the manipulation. He continues:
S) “It’s a reflection of… sometimes getting…because in the past, we’ve
got burned, you know, in the early days. We’ve got burned by, you know,
some company trying to manipulate us, and so we won’t do that anymore”.
I) Do you think that without having news sources or clear information, it’s
danger to be manipulated by…
S) “Absolutely. I mean, now, we’re so big and people try to manipulate us
everyday, so we have to be very firm about our rules”.
The purpose of the Bloomberg’s way is not only for the protection from the
manipulation from the news sources, but also for their own business strategy.
S) “By the end of our day, we want to write a story that can be published in
the New York Times, that’s our goal. Because we have four hundred
newspapers that subscribe to Bloomberg, and we want… we want to be
70
published in the New York Times and the International Herald Tribune,
because they are good newspapers.
I) They already have their audience.
S) “They have, you know, millions of readers. If we get in there, then we
think our story must be better than Reuters, or AP, or Dow Jones, which is
really…or AFP, you know, AFX, which is the competition. So we have a
clear strategy”.
5-6-4. Strong attitude to the complaints
To the complaints from the news sources, the Financial Times shows the self-confidence
firmly except the case of inaccurate reporting. Bogler talks:
“If they complain, and they usually complain to the editor, the editor of the
FT always has the policy to say ‘is there a factual mistake?’ If there is the
factual mistake, we will of course run a correction because it’s our fault. If
there is not the factual mistake, ‘please don’t waste my time by coming to
complain about me’… Yeah? And if it’s a question of our opinion, ‘too
bad’, you know, ‘that’s the opinion of the Financial Times’. And you are
right. Companies when they get very upset about something they do it.
And chairman and chief executives ring up straight to the editor, you know,
they go around the journalist, and go straight to the editor and trying [to]
create trouble, but the editor has always been very, very sort of robust, very
strong on that”.
He adds that most companies is “mature enough to realise it’s not personal”, so this type
of complains are very few. In addition, he also understands that the companies still need
to talk to the newspaper like the Financial Times, “because we are going to write about
them anyway”. He emphasise that the journalists should take a resolute attitude to their
71
own article and any complaints:
“When I write something that the company doesn’t like, and the company
then rings me up and says, ‘okay’, or the PR man rings me up and says,
‘okay, if you really made them angry, they’ll never talk to you again’.
That’s their threat. Then my threat back to them is, um, ‘but I am going to
write about this company anyway, and if you don’t talk to me, fine, that’s
your choice but that won’t stop me writing’”.
Dawkins talks about the case of the advertisers’ complaints. According to him, the
advertisers cannot complain about the tone, the length, and the page of the story. Those
complaints are “absolutely out of the question”, and there is no need to discuss about
them.
5-6-5. Codes of Practice
The Financial Times has its own ‘code of ethics’ (see the appendix). In December 2003,
the Financial Times updated its policy on facility trips, freelance work, corporate
hospitality and gifts.
According to its policy, “The principle that we operate on is that the FT does not accept
facility trips” in order to “control our own agenda”. In other words, the Financial Times
stresses on its independence from the news sources. If the trip is really necessary for the
72
article, the journalists are allowed to join, but the policy emphasises “strictly at the FT’s
expense”. This rule applies to not only the companies’ facilities but also governmental
or non-governmental places and operations. The policy defines that “there is no
obligation to print a story and that content of any story is a matter for the FT alone”. In
addition, the policy makes it a rule to state “clearly at the end of the piece that the travel
company or other sponsor has financed the trip” and the articles “should not appear on
news, features or analysis pages”. Besides, the policy set a rule that “journalists should
not accept a paid invitation to speak to a company they cover on a routine basis”. Bogler
explains about the way to deal with the trips:
“We pay for the trip, because we pay for it, we…then say we will only pay
for if there is journalistic value, you know, so if we think ‘okay it is
important for you to see the new plant, that’s fine, but then don’t go for a
week, go for two days, see the plant, come back and don’t spend four days
on the beach’, you know”.
On gifts, the Financial Times policy says “minor items may be accepted” such as
calendars, key rings, pens, paperweights, and corporate mementos.
“We are very strict on ethical things like gifts and trips. You cannot accept
gifts beyond a certain value, I mean very small, you know. If you look
given the gift or sent something, you can either send it back, or you give to
a raffle, we put it to charity, we send it to charity”.
He talks about his experience of going to lunch with his news sources, and emphasises
73
to take in consideration of the meaning of having the lunch with them. The lunch is not
the one with friends but his news sources.
“When I was doing the LEX column, I went out to lunch with chief
executives all the time. That’s fine. I am a matured journalist, then you
know, I know what’s…I know the game that’s been played. They think that
if they get to know me, and they tell me that strategy, and I know them
firstly I would find it harder to write something critical. Right? But on the
other hand, they have to realise that they are not my special friends, maybe
I have seen one hundreds of chief executives in a year, so I will write
critical things you know, whether I meet them or not”.
In addition, the Financial Times set their own code of practice for the employees’
financial interests and profits. It prohibits using the financial information they receive
for their own profit, and having any company’s the reporters directly cover shares or
securities.
According to ‘FT Editorial Department: Code of Practice’, it requires all editorial staff
to register their financial investments such as shares of domestic and foreign companies
no matter public or private, derivative positions, and corporation bonds to the company.
This registration keeps confidential, and the Editor, the Deputy Editor, Managing Editor
and Deputy Managing Editor have the access to this.
74
Bloomberg also has its own code of conducts. One of them is based on the idea that the
articles should be separated from the journalists’ financial interests. According to a
journalist of Bloomberg, the journalists are not allowed to cover about the events or
companies in which they have financial interest, direct or indirect, unless they disclose
the interest to their supervisor. Besides, they do not accept any money, gifts and the
treatment which is not available to the general public from any sources. About having
the financial investments, he continues:
“Basically, we can own mutual funds (because we can't control how the fund
managers decide to make their investments) but we can't own shares in companies
that we cover and if we buy other shares we have to disclose our interests.
Disclosure is usually to the team leader and bureau chief and this is passed on to
compliance people in the company (and probably lawyers)”.17
They are not allowed to write for other organisation including personal weblog sites.
17
The comments came from a journalist of Bloomberg through email in August 2006.
75
Chapter 6
CONCLUSION
The business/financial journalists recognise that their role in society is for the audience
such as the investors, the fund managers, the governmental people, and other people in
economy and business. The journalists are the parts of economic system, and contribute
to the successful market. An interviewee talks that the role is different from the other
media and it is not for the voiceless people’s voice but for the market economy.
However, it is true that the journalists working for the business/financial news
organisations tend to rethink of the meaning of their job. Some journalists feel difficulty
to investigate a certain issue and frustration to focus on profit. The business/financial
crimes like Enron and the insider trading in news organisations actually happened, so it
is significant for the journalists to regulate themselves strictly. In addition, to have the
big picture on every issue is necessary for the journalists to detect these wrong doings..
As a problem, the business/financial journalists tend to ride on the trend without deep
scrutiny. This is the one of the reason for them not to be able to detect the corporation
76
fraud. In addition, the rise of the public relations industry works as a block for the
journalists.
Most of the interviewees do not mention the propaganda model, and some clearly says
he is not familiar with this model. However, they actually recognise at least four
elements as problems and keep trying to tackle them. About the intervention of
ownership and advertisers, the journalists deny its possibility, and explain there is an
agreement with owners not to intervene the editorial contents. Besides, there is also a
clear boundary between editorial and advertising section not to allow the intervention of
advertisers to the contents. About the source, they try to have multiple sources to be
accurate, in other words, not to be manipulated by the one source. For the strong
complaints on the contents of the reports, they have a policy to explain firmly not to
change them except the case which they are inaccurate. Through the interview, there is
no discussion about the ideology biases.
Through this research, I have found that the studies on the business/financial journalism
are little compared with the ones on political journalism. The activities of the
corporations already spread globally, and the market system works as well. The public
77
relations industry also deploy internationally, so that there are risks for billions of
people to be affected when the corporation cause the scandals or financial problems. As
discussed in this paper, the corporations are the main actors in society, and have the
more power than the governments. I suggest the study on the relation between the
business/financial journalism and the source is needed from now on.
78
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LIST OF THE INTERVIEWEES
Blythman, Joanna (2006): interview over the telephone to the office, London 14 June
2006
Bogler, Daniel (2006): interview at the Financial Times, London, 27 July 2006
Dawkins, William (2006): interview at Odgers Ray & Berndtson, London, 11 August
2006
Inatome, Masahide (2006): interview over the international phone call, Tokyo, 2 August
2006
Koinumaru, Takushi (2006): personal correspondence [email], 26 July 2006
Kouta, Mitsutoshi (2006): interview over the international phone call, Tokyo, 27 June
2006
Kramer, Tali (2006): interview at Weber Shandwick, London, 22/29 June 2006
Miyashita, Naoko (2006): interview over the international phone call, Tokyo, 9 July
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Sasaki, Kazuyuki (2006): interview over the international phone call, Tokyo, 7 July
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Scott, Nigel (2006):interview at Yorkshire Evening Post office, Leeds, 4 July 2006
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Appendix
1. Code of Practice, Press Complaints Commission (PCC)
(Clause 13 Financial Journalism only)
i) Even where the law does not prohibit it, journalists must not use for their own profit
financial information they receive in advance of its general publication, nor should they
pass such information to others.
ii) They must not write about shares or securities in whose performance they know that
they or their close families have a significant financial interest without disclosing the
interest to the editor or financial editor.
iii) They must not buy or sell, either directly or through nominees or agents, shares or
securities about which they have written recently or about which they intend to write in
the near future.
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2. The Financial Times Department: Code of Practice
(23rd August 2004, ‘financial journalism’ section only)
In order to ensure best possible practice, the FT has established a code in respect of
financial and business journalism that goes beyond the standards set by the PCC. It is as
follows:
FT employees:
● must not use for their own profit, financial information they receive in advance of its
general publication, nor should they pass such information to others
● must not own shares or securities in any company they are directly responsible for
covering. Any reporter taking over responsibility for covering a sector or company
in which they have an existing holding should discuss what action they should take
with the Editor or Managing Editor – either to sell or to “freeze” the holdings.
● must not write about, or make editorial decisions about, shares or securities in
whose performance they know that they or their close families have a significant
financial interest, without disclosing the interest to the Editor or Managing Editor
● must not buy or sell, either directly or through nominees or agents, shares or
securities about which they have written or taken editorial decisions within the
previous six months, or about which they intend to write in the near future
● must not speculate by buying and selling shares on a short-term basis
Additionally:
All editorial staff must complete an entry in the confidential Investment Register. The
register allows for a confidential record to be kept of all the relevant investments held
by staff. Only the Editor, the Deputy Editor, Managing Editor and Deputy Managing
Editor have access to the complete register.
Even if an individual holds no relevant investments, this must be recorded. An
individual must update their entry promptly whenever a relevant change in their
investments occurs.
Specific investments that should be declared include:
● Shares of UK and overseas companies, public and private, including investment trusts,
unit trusts and open-ended investment companies, including Peps and ISAs
● Derivative positions, such as options or spread bets
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● Corporate bonds
● Those using advisory or discretionary brokers to manage their money should detail
their holdings as of their last portfolio statement
The folloing are excluded:
● Any details about the value of your investments
● Holdings in Pearson
● Insurance policies
● Gilts
● Holdings by other members of your family
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3. The Interview with William Dawkins
(London, 11 August 2006)
[I: the researcher, S: William Dawkins]
I) Your career started at the Westminster Press covering the issues of financial and business
area?
S) No, I was a general reporter, covering the local events. That is the things like a crime, clashes,
social events, local ***** [unclear - SE] weddings (laughter)
I) and you switch your career in the Financial Times.
S)Yes.
I) In 1983, you started to cover the business issues.
S)Correct.
I) And you quit the job, I mean the journalist job in 2004.
S)That’s right, yes. Two years ago now.
I) You have almost twenty-five-year carrer as a journalist.
S) Yes.
I) Can I ask why you decided to leave a job as a journalist?
S)Oh I see. Because I have got an offer of the very interesting job, being a head hunter.
I) It’s not because… you just feel cynical to the job as a journalist.
S) No, not at all. I had a wonderful career as a journalist. It’s a great job.
I) How do you feel about the current situation of the business/financial journalism in general, as
a reader an audience of that kind of journalism? How do you evaluate the current the Financial
Times reporting or other financial media’s reporting such as Bloomberg and Reuters in general?
S) I suppose the value of basic news has become much less in recent years, because good
quality news is available in real time, anywhere at low cost.
I) Like the Internet?
S) Exactly, the Internet, local radio, television. So…on the other hand, the value of analysis is
much greater than it was. We do business in the world where…, the major companies are
competing with each other with access to the same information, everybody, the same technology,
and the finance with the same cost, which means, the best way for that getting to competitive
can differentiate from the rivals is to be able to foretell the future, that means, being able to
interpret the data or all around.
I) The audience tends to… in a sense, be confused, because the information is overloaded. The
journalists have a role to classify or analyse what is happening…
S) To interpret. Yes. To shine the light through the storm.
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I) Make the road clearer.
S) Yes. We know… we have…access to more information that our parents did, but we are not as
wise as them. And it’s the job of journalism, talking about the serious business journalism, to
add the wisdom. So, that is what the role of serious business journalism should be. Overall
market… for newspapers is fragmenting. There is much less…there is less room now for
promptable business providing general news than they used to be. Newspapers are responding
in two ways…there are, no, three ways. Newspapers are responding becoming niche players. So
the serious newspapers are moving up market, the down market newspapers in this country are
moving further down market.
I) Like the tabloids?
S) That’s right. They, the British tabloids… I don’t know it’s the same thing in Japan, tend to
specify much micro entertainment journalism. They do not offer the truth. They offer gossip,
rumour, excitement, sex, thrills…
I) It is almost similar with Japanese tabloids.
S) Yes. I mean, this is the newspapers. This is the new kind of journalism. It’s not the journalism
that anybody from Nikkei will recognise as a rep of the journalism. I don’t I detest it completely
*****. That wouldn’t work. Rather I have thrown it away in that area. The British newspaper in
this period is special because…as unique in the world, I think, because it’s…the top quality
papers are among the very best in the world. And it’s…low market newspapers are among the
worst in the world. In this country, you will find the best and the worst journalism side by side.
So it’s a wonderful place to study journalism.
I) Yes. I am very happy so far to study here (laughter). So have you ever seen the problems in
business/financial journalism? I have talked to journalists in this area, and they sometimes
complain about the routines to fill in the pages. They have a pressure to fill in the pages so they
need to collect the information all the time, and the editors require filling in the pages even if
they don’t have the information to write. The thing is, they tend to ask the news sources like “do
you have any news?” or “recently what is happening in your company?” To be honest, they feel
it’s kind of not so newsworthy, but on the other hand they need to fill in. That’s why they write
the articles. Some say routines make them frustrated, or wonder “it is not newsworthy but I need
to fill in so that is why I write” or something. Did you feel the same way when you were in the
Financial Times or have you ever seen that kind of less newsworthy information put on the
newspapers?
S) No, not on the FT. In the FT, we have far more news to put in the paper than space to carry.
So what we serve to the job was to filter and profile the news for the print version of the
newspaper. And then use the websites to carry all the materials that ***** the newspaper. For
example, we used to do we would… everybody had an interview with the prime minister of
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Japan, we’ve carried short version of the interview in the newspaper, say, a thousand words and
then have the full text on the website.
I) Talks about the relation with China on the paper, and may be other domestic issues can be
read on the website.
S) Absolutely. So the key problem facing the serious newspaper is not at all to find the news to
fill the pages. The problem is the other way around. It’s to decide what to filter out. Your readers
are paying you to decide for them what is important to know in the world. You are not being
paid to throw stories onto the page.
I) So in a sense, the problem is about how to use their criteria to choose the news?
S) That’s right.
I) Another journalist told me that recently the audience is getting much smarter than ever, so
they just want the media to report the accurate information. They don’t need any kind of deep
insights or opinions, they just need the information quickly…as quickly as possible, and they
can judge by themselves.
S) Yes. The first part of that is true, and the second part is not. It is true that the readers are
smarter these days, and require accurate information, that means if they judge it’s much easier
for them now to go elsewhere for accurate information. If they are not satisfied with what
they’re reading in the Nikkei, it’s much easier than it used to be for them to go and get them
somewhere else…
I) Put the word in the Google…
S) Exactly. It makes much more important ***** the serious newspapers rather than Nikkei to
be accurate because you lose your readers much more easily now than it would be the case
fifteen years ago.
I) Sad to say some corruption happens…
S) Yes. It is not true. Yes the readers are smarter, but it is absolutely not true that readers have
no… don’t need analysis. Because of what you are saying before, because of our modern world,
we have too much of data and not enough wisdom. We are so surrounded by ***** facts but we
don’t know where we are going.
I) As you said, it is necessary to have kind of a light to make the road clear.
S) Yes.
I) Actually, that comment I mention comes from the journalist working for a magazine. He said
to me that if they have the feature stories about the ranking of… kind of… for example… the
quality of the bank service. With having that kind of ranking, easy to appeal the ordinary readers.
If he does not have that kind of ranking system and just write about the analysis features, the
sales is obviously smaller than the ranking type. So that is why he explained to me that way.
S) Right, okay.
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I) What do you think about the recent journalists? Should learn or study more? On the other
hand, journalists tend to be lacking knowledge. That causes a problem. What do you think about
this point? Do you think that they need to learn the business or the related law more to be a
journalist?
S) A good business journalist now needs to be more skills than the people in my generation
keeping the business journalists. I wouldn’t hire myself ***** (laughter). I would think the most
useful to study economics and politics to be able to understand trends in the global… in the
national and global economies, and also understand how people can shape the world… nations
that what the politics is about. Used to be the case you forget to include the jobs as the
journalists with ***** short hand, and being able to turn out the ***** story. Well, it’s the
premium knowledge on journalists who do more than turn out the ***** story but all same
***** interpretation then they are going to have a good general education in economics and
business.
I) Have you ever seen any kinds of problem like journalists tend to be manipulated because of
the lack of the knowledge?
S) Yes, all the time.
I) To think of my case, Nikkei, it is absolutely up to individuals to learn something by
themselves. There is no study group or education system in a certain area of the market,
financial law, how to read the balance sheet, or something like that.
S) It is critical for serious newspapers to train their journalists properly. The Nikkei’s readers are
among the most intelligent people in Japan. And if they sense your stories are of low quality,
they will leave and the Nikkei will collapse. It’s critical that you are properly trained.
I) I heard that the Financial Times provides some kind of training program for the journalists.
S) The FT invests a huge amount on training. They sent me to business school in Seattle in order
to learn management. When I went to Japan, I stopped to work for four months to try to learn
the language.
I) To understand what they are talking about?
S) Exactly. This is normal. They teach journalists accountancy, financial reporting, balance
sheets. The FT puts a huge amount of money into training its journalists and raising their
intellectual standard all the time because that is the future of their journalism.
I) And it is a very critical thing. That is totally different from Nikkei, I think. You said that all
the time you found the problems are lack of knowledge. Can you give me any examples you can
think of?
S) It’s a constant risk. Junior and inexpert reporter will fail to understand the story because they
will simply write down what they hear from the experts and be unable to exercise their own
judgement. And that way, it is very important to do two things they must be trained. While they
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are growing up, their stories need to be scrutinised by the expert editors who will spot the
problems and inadequacies before they published it in the newspaper.
I) So individually, they need to be trained, and also the articles need to be scrutinised by the
experienced expert editors.
S) In a well functioning news where the editor commissions of the article, he will believe the
reporter, so well enough, so the reporters set the sort of white line if it inquires to start up with,
and then the article comes in, that say the editor will scrutinise it critically and hold the reporter
to count, ring it and say “what do you mean by this?”, and “this article could be improved in the
following ways, so please do so”.
I) And another journalist mentions the example. He covers the biotechnological medicine area.
He got the information from the news sources like company A developed the medicine for a
cancer or AIDS or something like… when he got that kind of information, he thought “oh, this
is the big news”, but the editor said “we are not sure that the medicine can be authorised and go
to the public or can be available for citizens to get that kind of medicine”. So the editor kicked
out the information and told him not to write. He was personally frustrated with that decision. It
always happen the conflicts between editors and journalists. In this case, what is your opinion?
The journalist should persuade the editor or the editor’s decision was right?
S) They are both journalists, okay? Editors are journalists, too. In this case, the reporter should
well enough informed to make the case for the story. Reporter should be the expert. He should
tell the editor. You have to make the argument. The story is important for the following three
reasons. You should sell or inform and the editor might say “Okay, I understand your following
three reasons and they are correct. But I still think your story is not important because we’ve got
something else which is more important”. But it shouldn’t be the questions of the foundation of
the story. What the editor should do is assess the relative merit of the story. We get everything of
what is going on the world at the time and the journalist should be good enough and the reporter
should be good enough to give the story that is basically right. Something seriously wrong in the
newsroom is the editor questionning the fundamentals of the story. You will find out that all
three points which we thought made it important are wrong. And any gonna serious problem. It
is okay if the editor says “I disagree with the story that is important not because there is wrong
in the story, but because there is story B will be here which casts yours into the shade, that is
going to top of the page.
I) For example, the Financial Times has much more information, so it is easy to fill in the pages.
In a sense, the editors can choose the information which is valuable and more newsworthy.
S) Yes. Absolutely. That choice is very hard to make because there are all kinds of things which
can…all kinds of challenges the editor has to meet and that choice the first is… it is very easy
to… give too much of the important to the story because it comes from one of your best writers.
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Or… it’s very easy to… ignore… a small development which might be a part of our trend. It’s
very hard for a good editor to spot the stories for representing the beginning of the trend. It’s
very hard to make connections that they could be stories that are related to each other, or be put
together. Or tell different corners of other story. It’s very easy to… follow the crowd. One
problem is that you’ve got the big story like the terrorist threat in London yesterday, you think
to yourself and “well, everybody else is going to put that on the front page, so I will, too”
(laughter). You have the courage to say, “Oh, we have got something even more important” or
“Oh Will, do it in the different way” you know, “okay, let’s take that sense sort of terrorist or
something that send it, should go on and move the front page” but every newspaper should treat
it in its own way.
I) The Financial Times will talk about the financial or economic impact of the incident…
S) The case of the Financial Times is very hard to get.. again, to get a right balance to the
economic impact and the fact as an important story in human terms, you know. It could
be…um… you know… it would be very easier, very bad for the Financial Times to write a story
that says something like “airline shares went down yesterday because of the terrorist threat”.
That’s too financial (laughter).
I) Yes, yes. Maybe…the Financial Times will write that kind of stories?
S) That certainly gives you an angle, yes.
I) The role of the business/financial journalism sometimes, they need to focus on the
economical impact or the influence on the stock market…
S) Business journalism should look for the big picture. It should look…business journalism
should not be just about the finance and business. It should explain how business and society
affect each other. It should place business in the context of society. If you fail to do that, if you
are too financial, then you just become your stock market newspaper. For the problem, business
newspaper does what business does which is, ***** how financial business event affect the way
people behave, how they affect markets. Covering Japan for example, two thirds of Japanese
GDP is consumer spending. To understand the Japanese economy is pretty important to
understand how the Japanese public feels, how do the Japanese public ***** with earthquakes,
educations, weather, politics, fashions, all things come together.
I) Only writing about the data cannot see the society, so it needs to ask or interview the ordinary
people about how they feel about the economic situation in reality compared with data. Data
indicates the recovery of Japanese economy, on the other hand, people don’t feel the same way,
or something like that.
S) Yes. We look for the evidence people behave I mean, I am not saying you should put the kind
of a poll of shopper in Ginza on front page. You should be able to write, when you write about
the Tankan, you should be able to throw it in the evidence of how consumer is behaving. It
93
might be the financial results of the consumer companies, it might be…I don’t know…some
new trends fashion. Look out for the whole picture.
I) In your experience, from 1983 to 1984, you covered UK companies, so you interviewed
management teams about their strategies and business.
S) Yes.
I) What was your criteria to choose the news?
S) Oh I see. I was covering quite a few companies. Anything with the listing of the London
Stock market. That was very simple. You covered the results or takeovers.
I) Did you enjoy at that time?
S) Yes.
I) Did you feel yourself or your job as just reporting from left side to right side, or that kind of
feeling?
S) No, it was not just reporting in those days; great deal of analysis and interpretation was
involved trying to… we were about ***** write articles of assessing the companies, strategy
whether the share prices was over valued or not, so gave you the fascinating insight how to
value the companies and… how to praise the performance of theit management.
I) What was the news for you at that time?
S) It was extremely simple, it was well defined. We had population of the companies we simply
have to write about. It was a part of the service that the readers of the FT expected. Every
company in the top 100 on the stock exchange needed if you expect to see reported on
I) What kind of strategies they have, or that kind of things you covered.
S) That’s right.
I) Did you write about the strategy like Merger and Acquisition as a scoop? Was it possible for
you to do that?
S) To get scoops?
I) Yes.
S) Very difficult.
I) From your experience, can you give me your definition of the scoop in the business/financial
journalism?
S) Right, scoops (laughter)… well, there are two kinds of scoops that is a genuine news scoop
which is a major event with significant impact on the world and which is only ***** to a few
people, or there is a scoop of interpretation which is spotting a small event which apparently
doesn’t mean anything very much and explaining that it does mean a lot (laughter). Sign of the
trend, you know.
I) Merger and Acquisition, or promotion or resignation of the executive teams, or that kind of
things. Can I interpretate them as scoops?
94
S) Yes, they are very rare. The FT was quite good to be getting them.
I) Did you get that kind of scoops as well?
S) Yes.
I) I know it’s difficult to get that kind of scoops. How can you get that kind of scoops?
S) It’s been building the trust with your sources.
I) Sometimes, people tend to say, “because of the insider dealing or other regulations, the stock
market regulations, I can’t say anything to you and please wait for the announcement”. It always
happens in the business/financial journalism in general, but you could get the scoops because of
building the trust with your news sources.
S) Yes.
I) How did you build the trust with sources?
S) It’s a long term relationship with them…with the sources. You establish your relationship
with them. When they continue [to send] lots of information confidentially and you don’t report
it. You know I tell you something as your background knowledge on condition if you do not
report it, then if you demonstrate to them you could be trusted that way and then I trust you
again.
I) That kind of accumulation creates kind of mutual understanding each other and building the
trust.
S) That’s right. One of my colleagues contacted a scoop on Exxon taking over Mobile on that
basis of building up the relationship and trust with the banks. On the day, the two companies
were ready to announce the takeover. The FT has been given so much, a lot of information. It is
already written the articles that have done the analysis written thousands of words, then as soon
as the companies were ready to go they could put it in the newspaper appeared ***** the
morning, they announced the takeover. Twenty four hours ahead of any other newspaper
because it was reported on the morning after that.
I) A beautiful scoop.
S) A beautiful scoop. Very nicely timed, you see, because it didn’t contradict any stock
exchange rules on disclosure information or insider dealing. The information came out with the
FT at the same time with it came out all other investors, but well ahead about other newspapers.
And you know, when I was in Japan, I thought I had the trust relationship with the vice finance
minister who would tell me about his thoughts on dollar-yen relationship. He would ring me up
every month, and what I would do is I would write down exactly what we said and report
exactly what he said. And after I had done once, he was happy to do it again.
I) Because he thought…
S) You could trust. Yes. Big fear was being misquoted by foreign newspapers. Quite easy to
happen.
95
I) Japanese newspapers misunderstood his comments or something…
S) No, Japanese newspapers were good and he trusted them, too, but he needed to talk to
yen-dollar investors in London and New York. They are not published there.
I) Oh I see. Sakakibara?
S) Yes.
I) I covered once in 2001, always asking him about the currency situation.
S) Sakakibara, a good man.
I) Can I have your experience and example of the scoops? Most memorable, successful…
S) Yes… I think it was…when the European Commission had launched a ***** rate the British
Steel for price fixing with the risk of ***** twenty per cent turn over.
I) When was it?
S) That was in 1987, I think. I had an exclusive on that. When the French government was
planning to launch the restructuring of its semi-conductor industry, the French industry minister
gave me the scoop on that before French press.
I) Kind of a big story, a global issue…
S) Yes.
I) I am working for Nikkei and the news sources evaluate that Nikkei has a value or reputation in
the business society, so they approach me with leaking some information. “If I decide to do
something, I will tell you” or that kind of talk. They sometimes leak the information. On the
other hand, I am just feeling like why he starts telling me. He may have some trust, but on the
other hand he may have an intention to manipulate or control or deliver the message to the
public. So, what is your tactic not to be manipulated by the news sources through leaking
information?
S) To do your homework. To know the story and all the background very well. so you know
when you are being abused when you are being lying to you, you can spot a lie. If you are
receiving a scoop as a reporter, you should be able to answer the question. The question to
yourself. “Why am I been told this?” You should also be able to answer to the question, “am I
being lying to?”
I) Yes. You did the self-examining before you wrote those scoops.
S) Yes. I can give you the examples where I was given bad scoops, where I was told only half of
the truth, sometimes a lie.
I) Have you ever experienced to write bad scoops?
S) No.
I) Okay. People sometimes say that they need to have two or three sources, independent sources.
If the only one source gives the information, the editor cannot trust what the journalist says.
Some journalists are asked to collect another source who says the same things, they can start
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writing. This may be one of the tactics or strategies to protect the journalists from the
manipulation of the news sources. Do you have the same way to have several kinds of news
sources?
S) Yes, I mean, you have to use the common sense. It depends on who is the source. Normally,
if the information is new or in question, you should have at least two other sources. If the
information involves other parties, you should talk to the other party. You know, if there is one
company taking over another, you have to talk to both companies.
I) In that case, company A sometimes leaks to the journalist about “I am going to buy company
B”, and the journalist goes to company B.
S) Yes.
I) A and B has a kind of confidential negotiation. In the middle of the confidential negotiation, if
the journalist says “are you keeping in touch with company A?”, B may feel like “How did you
get that kind of information? This is the confidential, so the information was leaked by company
A”…
S) You have to pay with complete owner, and discuss. Company A tells you “I am taking over
company B” then you say “Can I go and talk to company B about it?” (laughter)
I) That’s very reasonable.
S) And they say no, then you don’t. And then you say “Well, do you want me to publish the
story or not?” and they say “Yes we do”. And you say “Well, I cannot publish this story unless I
have talked to company B ‘what are you going to do about it?’”
I) Okay, in a sense, to take the permission is important of the news sources like “Can I write it
right now?” or “I am going to write it some day, so when is the best?” or that kind of the
negotiation is necessary.
S) Yes.You can do it within the limits. You have to be independent, but you’ve got to behave
with complete integrity. The rule I apply is… do you have children?
I) No, I am single.
S) Imagine you are going to explain to your father or your mother what you looked down,
would you feel happy about it? If you don’t feel happy, then something is wrong. Or if the way
you behave was reported in your own newspaper, I reported a takeover company A to company
B in the following way, you know, I didn’t talk to anybody, I didn’t check. Would you be happy
about it? The answer is no, then don’t do it (laughter).
I) In your experience of the European Commission case, so you’ve got the information from…
S) I got it from the European Commissioner for the industry, the competitions were there. They
told me they lost the rate British Steel price fixing, so who did I ring next? British Steel. I said
“I’ve just been told by the European Commission you’ve been rated for price fixing in you’re
running cartel”.
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I) You went both.
S) Yes.
I) You performed very carefully not to change the situation, not affect
S) No, no. Pick up the all information available and you need to be fast, of course, because if
you are working on the scoop, everytime you ask somebody question, you release the
information. As soon as you start asking questions, you lose confidentiality and you lose secrecy.
You have to be doing this really fast, get it into the paper quickly before anybody else write
down about it.
I) Competition exists, and on the other hand need to collect the information secretly...
S) Yes, you need to get around. It’s the scoop which is going to come out before anybody else.
French industry story, for example, that was breaking as I was being told that you are the people
***** on the story building without, so I had a talk to half a dozen of very senior people get
their response to really fast get it in the paper. What I did is I send all those story and I thought,
when I’ve got it and thought story was really amazing, so went back to my original source who
was the industry minister of France at that time, told him what I am planning to write and say
“Look, do you really mean this? How would you feel if it exists in the newspaper tomorrow?
Do you really want me to publish this?” Then he said, “Yes, go ahead”, and… we’ve got it.
There is nothing worse publishing the scoop, and then you pick up the Nikkei and read it. “Shit,
***** are really mean to” (laughter). You’ve got to be really confident, ***** comes from the
experiences is good for all the journalists to do it. You have to be very careful, very fast and
very professional.
I) To be honest, I am just covering the venture business right now in Japan. The venture
business, the start-up business, which already went to the public. They open their stocks, and I
talk to the venture business executives. They always open to us because the Nikkei is the only
one to cover their business on daily basis, so I can get the information of their
Strategies, their plan to Merger and Acquisition and that kind of information can get before the
announcement. I can write as a scoop “company A is under the negotiation with company B”.
And after publishing that kind of the articles, the stock price of the company A or B is getting
higher, increasing, or sometimes decreasing. The articles affect the market by the articles. I was
feeling like am I contributing to their stock prices higher by writing the articles…
S) No, you are just the part of the market. You are the part of the market.
I) That kind of things is not like the journalist job, so basically that kind of experience brings me
to study the journalism. In reality to be honest, it sometimes happens in Japan, and what about
this country?
S) Yes, a lot.
I) By writing the articles, and then the stock prices…just contribute to the
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S) You’re publishing information that is going to be published anyway. It’s not the newspaper. It
is not driving the stock prices up. Good business press is the part of the market where
distributing the information.
I) So, it’s not a bad thing to be a participant of the market or contribute to the market.
S) That’s a very good thing because it improves the quality of the market. Good business press
is a part of good market economy. The Nikkei is the important part of Japan’s financial system.
Policy information and corporate **** would be hard to get somewhere else.
I) Apart from the stock price, what do you think about just writing some companies’ strategy or
company news, that means kind of free advertisement, or giving the creadibility or reliability of
the company under the name of the Financial Times or Nikkei? Putting the article about the
company, does that mean giving some credibility of the business? Have you ever thought that
kind of things?
S) Oh yes. It’s a constant danger. You have to exercise your independent judgement as a
journalist to give the credibility only to the credible companies.
I) Journalists need to have independent mind and judgement, and sometimes kick out the
information because it is not newsworthy.
S) Yes, that’s right.
I) As your experience, what is your criteria to judge the information as the newsworthy
information? You may have some kind of the criteria of the judgement.
S) What is news? (laughter)
I) Yes, that kind of things.
S) Well, it’s got to be interesting value to your readers, so…it’s Nihon Keizai Shimbun or the FT,
it has got to be economic, or financial or business consequence.
I) Did you think that your audience were economical groups, investors, businessmen, or that
kind of people?
S) For the Financial Times?
I) Yes, for the Financial Times.
S) It was market operators, financiers, business people, government figures, public sector and
academia.
I) Did you feel that you just contribute to the wealthy people or “elites”, so called?
S) Yes.
I) Just writing for that kind of people.
S) Yes. We are writing for people who influence the world. Definitely writing for the elite,
business elite. The Financial Times is not the general newspaper.
I) Yes, correct. According to the journalism theory, the journalist should be one to take the
voiceless people’s voice. That’s one of the role of the media.
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S) Not the business newspaper. Not the business press. The business press is to help business
people and financial people make judgements, understand what this world ***** It’s not the
voice of the people, not at all.
I) Not for the person who has no voice.
S) No, no. So the people with *****.
I) In that sense, the business journalism is totally different from other type of journalism.
S) It is. Very different.
I) At this point, how do you feel about it? Is it okay?
S) Yes. It’s very important. A good business press is an important part of successful economy.
The US has great business newspapers. Same as Britain, same as Japan. Business people use
these newspapers to help and make judgements.
I) They are doing their own business by using that kind of information.
S) Yes, and these are the people who hire, who provide jobs for hundreds of thousands of people
who pump wealth back into the economy. It’s very important to the well being of these countries.
They perform well in their work. Business newspapers are more helpful if they are doing their
jobs properly.
I) We cannot deny the role of the business/financial journalism because, as you said, it has many
impacts to the people who work in the business, and it affects a lot society.
S) Yes.
I) The business journalism is sometimes criticised because they just deal about the profitability.
The profitable company is good. That kind of atmosphere created by business journalism and
the company executives tend to think what they should do to make the profit. For example,
medical bio-technology company tries to start the business to sell the irrelevant products to
make the profit easily. What do you think about that point? To focus on profitability sometimes
make them go the wrong way.
S) Oh I see, what you are suggesting is that the newspapers write stories that is nice about their
advertisers…
I) Journalists sometimes tend to focus on profitability, sometimes the company fail to make the
profit and go deficit. It shows that profitability is important, and making profit is the most
important thing for companies. That kind of article creates the mood that the profitability is
important.
S) So it should.
I) Do you think so?
S) Yes.
I) In that case, how do you think that the business executives tend to think to make the profit by
selling the irrelevant products?
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S) Irrelevant?
I) Irrelevant business. Originally they develop medicines, for example, suddenly, to make the
profits, they sell another… like the papers or commodities.
S) Oh I see.
I) Is it really good things for the company?
S) It really depends on the company. It’s a very difficult question to answer. I mean, surely the
first duty of the company is to provide a sustainable growth in profit in a kind of ethical and
legal way. Whether it does, it might make the chemical selling paper or flying to the moon, it
doesn’t matter as long as it’s good business which makes contribution to wealth and
contribution to society by employing people. Businesses’ invested duty to society is to make a
profit, and from that ***** all other good things like behaving ethically, employing people,
treating your suppliers and your customers as well and all that kind of things. But all those soft
values can’t happen, it just can’t happen unless the companies are profitable in the first place. I
am not saying that the companies should make a profit at any cost, not at all, it should make
profit judiciously and wisely.
I) It’s important to have profitability because it creates many employments and opportunities to
invest or something like that.
S) That’s right. Exactly. Without money, there is no bread, and if there is no bread, there is no
society.
I) What do you think about Enron or WorldCom issues?
S) It always happen these things. Risk is the part of the capitalist system. If you don’t take risk,
you cannot make profit, you cannot make business.
I) That’s how it goes.
S) Yes. Now governments try to compensate for that. I’m putting in place strong rules of
governance. But however strong your governance rules are, companies will take risks, and
people will… sometimes be dishonest. However good your rules are, frauds will happen. And it
is always going to be impossible to detect well-organised and well-concealed fraud. In fact, the
best way to conceal the fraud is to run a company that appears to be very well governed. That
was the case of Enron. The governance standard of Enron was superb.
I) How do you think about the financial journalism role at that time?
S) Poor. It was poor. Nobody detected it. No financial newspapers stood back and asked the
basic questions. The standard of reporting was weak. Except for one. I think it was the New York
Times. Was it Time magazine? Check. There was one US newspaper which warned that
something was going wrong at Enron. Check it. The rest of us completely failed because we
weren’t well-trained about it.
I) In a sense, that is the reflection point for the journalists. As a case study why the journalism
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cannot warn the public about Enron or WorldCom before it happens.
S) Risk is a part of our system. It’s the same in Japan.
I) Yes, Livedoor issues. Is it possible for journalists to say that risk is a part of the capitalism
system? Or journalists should mention any kinds of risks before it happens, that’s the
journalists’ job? What do you think about this point?
S) Risk is a part of capitalism, and a part of the service of the good journalist is to detect a risk.
Just point it out. You don’t need to make judgements, just report it (laughter).
I) As you said, lack of knowledge, or lack of professionalism, they could not find or detect the
incidents.
S) Yes.
I) How can the journalists get that kind of ability?
S) Through reading, experience, knowledge, constant questioning to the expert sources, through
moral courage, having the ability to say what nobody wants to hear. How many people wrote
the height of the Internet bubble? A large number of these companies is going to go bust so that
basic rules of the business that you must make profit survive. We’re still all the same. People
were writing a lot of rubbish about the new economy, and how the digital world reinvents our
business. It was all rubbish. How many people have the courage, stand up and say “Well, these
businesses are not going to make a profit” and they have collapsed, haven’t they?
I) Because of the lack of those abilities, the journalists cannot do…
S) Some can. I mean, there are some really great did that but there are very few. They have to
know… enough to know what they are talking about, very well-read and experienced and
courage to do an honest job.
I) How do you try to get those kinds of abilities by yourself?
S) You always ask yourself what you miss. Question yourself. Apply the high professional
standard to yourself.
I) That is what you have done so far.
S) No, I failed (laughter). That’s what I would like to have done.
I) How do you think about if the ownership or sponsorship say stop writing? If you start
something to write, and the ownership or advertiser notice that you are trying to write
something which makes them bad, and say please stop writing. How do you react on that?
S) Very negatively.
I) Ignore them?
S) Well, it depends on what conditions of your ownerships are. But on the FT, our owner is
Pearson, never intervened in what was written on the paper. It was completely unacceptable to
do that. They were very good about it. They never did it. And there was a very clear division
between the editorial department and the advertisement department. The editorial staffs were
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never told what the announcement is going in the paper on that day. They didn’t know who they
were, the advertisers were.
I) It’s free to access everywhere without caring anything.
S) That’s right. And if the advertiser complained about the story to the editor, he would take
quite a tough line with them. If they didn’t like the tone of the story, he would write to them the
polite letter saying “Oh I am sorry, we are independent”. If you think ***** the advertisers
found something inaccurate, that was different matter, then we would correct it. But they
couldn’t complain because they didn’t like the tone of the story, or they didn’t like, ***** it was
too short or with a wrong place, absolutely out of question.
I) Once fact is misunderstood, it should be corrected, but the tone or the way of writing nothing
to discuss.
S) Yes, exactly.
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