Harvard prof: Business journalism is watchdog that bites

Gregory Miller, a professor of accounting and management at the Harvard Business School, has a recent research article where he argues that the business press is diligent in exposing corporate misdeeds.

“The press is important in uncovering these things, they uncover a third of them in advance, and they even create the original information in a large percentage of the situations. Often, the press is way out there before the SEC,” explains Miller.

His wide-ranging survey of press outlets found no evidence to support the common criticism that coverage of errant firms is influenced by advertising revenue. On the other hand, he detected clear bias in the types of companies that the press targets for special scrutiny.

For this reason, business people are wise not to underestimate the ability of the press—particularly the specialized business press and trade publications, he says. “The press provides new and original information. A lot of people didn’t expect that. People in the press did. But most other people really are surprised to see that because they think of the press as repeaters and not as creators.” His paper, “The Press as a Watchdog for Accounting Fraud,” is published in the December 2006 Journal of Accounting Research.

Miller, whose favorite non-academic business reading includes the Wall Street Journal, the Financial Times, and the investor relations magazine IR, recently talked with HBS Working Knowledge about the implications of his work.

Read Miller’s Q&A with Martha Lagace here.