Friday, September 17, 2010

Chinese Walls

In Joined up Daily Mail, @psbook via @chris_yapp points out a contradiction between the front page (attacking @stephenfry) and an advertisement on page 27 (featuring @stephenfry). "Perhaps the Daily Mail should try a little harder not to offend their advertisers?"

The Daily Mail is not my favourite newspaper (as readers of my posts on the POSIWID blog will know), but with this news my respect for the Daily Mail has gone up a notch - at least they aren't allowing their advertisers to influence the front page.

What's this got to do with architecture? We have here an example of a clash between economics (which apparently favours joined-up thinking) and ethics (which in this case apparently favours the opposite), typically resolved by the erection of an intra-organizational boundary known as a Chinese Wall. This is a structure within an enterprise intended to reduce conflicts of interest, asymmetrical information and moral hazard.

For example, financial institutions are supposed to have Chinese Walls, to prevent various patterns of inappropriate behaviour, including Insider Trading and Insider Recommendations. Among other things, the Chinese Wall is supposed to protect investment analysts from commercial pressure from other parts of the same organization. Recently, there has been much criticism of financial analysts (especially in America) who recommend the purchase of stocks simply because their colleagues have a commercial interest in promoting that stock.

Sometimes of course, the Chinese Wall is just a notional boundary, with little real effect - for symbolic or compliance purposes only. Although the actual information flows may be concealed, a strong correlation between activities on both sides of the wall may be sufficient evidence that some collusion has occurred. (Clearly architects need to appreciate the differences between official structure and defacto structure.)

In journalism, there is always supposed to be a Chinese Wall between editorial and advertising, to protect the objectivity of the journalists from commercial bias. This principle is often blatently breached, so it is pleasing to see the Daily Mail following the principle on this occasion. Although I disagree with their attack on Mr Fry, I respect the fact that the Mail has chosen to offend their advertisers rather than abandon its strongly held views.

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