It seems that no matter which company is in the headlines in recent weeks, the bottom-line issues boil down to the need for reform in corporate governance and the need to bolster investor trust. When it was announced that President Bush would give a speech on Wall Street on the need for corporate America to reform itself on all of these accounts, there were great expectations that a President would take on big business in a manner not seen since Teddy Roosevelt walked softly and carried a big stick.
President Bush's speech, and reaction to it, was widely covered by the media, and an analysis by Media Watch left little doubt that critics seem to have the upper hand. Of a sample of 29 articles and broadcasts analyzed, 18 were largely critical of the speech's contents (or lack thereof), three stories were primarily supportive, while the remainder were balanced in their reporting.
Bush was seen as not wanting to alienate his pro-business core constituency within the Republican party. Bush made clear within his speech that he prefers that corporate America clean up its act through higher ethical standards, although he outlined plans for a series of new law-enforcement measures. The Los Angeles Times (July 10) noted that Bush is skeptical "about the ability of Washington to regulate social problems."
Coverage depicted most business leaders as supportive of Bush's plan.
But as The Wall Street Journal (July 10) reported, it appeared to be more for the reason that they were relieved that Bush's plan was "addressing the issue without being even tougher on them."
According to media reports, Bush is trying to walk a congressional-election-year tightrope, wanting to please various constituencies with conflicting goals. On the one hand, Democrats, seeking an issue that they can use to chip away at Bush's wartime popularity, are pushing to establish harsher legislation than what the President is calling for. Institutional investors also want more sweeping changes in boardroom policies, such as accounting and stock-options reform. And then there is the general public, which has been burned by the numerous instances of corporate fraud and conflicts of interest, the dot-com bubble, and the general slump in the economy.
The most frequent criticism was that the reforms outlined by Bush were just not tough enough, with several articles suggesting he was just giving lip service to the notion of reform. The San Francisco Chronicle (July 10) quoted Jack Bogle, the founder of the Vanguard Group and a member of the Conference Board, as saying, "I would give the speech a B+ or an A- for PR, but a C+ for action. It was a very strong speech on the enforcement side, but some of these extremely important, crucial issues like stock options were omitted."
Several reports depicted Bush's speech as a lost opportunity to seize the leadership on the most pressing domestic issue facing America. There were also indications that Bush might sign a Democratic bill - tougher than a Republican proposal - that has just been approved by a Senate vote, because the political costs would be too high for him to veto a bill on this issue.
In short, it looks like the President's approach may be outflanked, and that stricter regulations may be put into law on corporate governance.
The battle will certainly be played out in the media over the coming months, as Congress looks to act before going into recess before the November elections.
Evaluation and analysis by CARMA International. Media Watch can be found at www.carma.com.