Free Speech
The press have always had a key role to play in the maintenance of democracy. They have free speech rights which are protected by the courts – in particular they have the right to protect their sources – which other people aren't afforded. However, there's a view that this power brings responsibility, and that responsibility is to hold the rich and the powerful to account. Yet financial journalists have, with a few exceptions, been conspicuous by their absence when the great financial scandals of the twenty first century have unfolded. Indeed they've often been implicated in the issues, egging on investors with hyped up stories of superpowered CEOs and overly optimistic forecasts. And, frankly, if financial journalists aren't able or willing to exercise their duties, should we continue to allow them the rights to do so?
Agency
At the heart of the modern corporation is a peculiar split between their ownership and their management. Shareholders own the firms but executives manage them. This split opens up an agency issue – the interests of the managers are different from those of the owners, and this separation of responsibility raises great temptations for managers. As we've seen, time and again, many executives are unable to resist.
Still, a great many executives don't allow themselves to fall victim to such tendencies but whether this is because most of them are fundamentally honest and moral or because they fear the sanctions that would apply if they were caught is an open question. In one view managers are less likely to furtively steal their shareholders' business if they are placed in the danger of possible exposure by financial journalists. This argument sees journalists as gatekeepers, helping to keep the majority of managers on the straight and narrow.
This would suggest that the role of financial journalists is critical to the good functioning of markets and the way that they're treated by regulatory bodies argues that they share this apprehension. Financial journalists' public interest defence – essentially a protection against possible defamation proceedings – is part of the regulatory framework on both sides of the Atlantic. This defence exists in addition to many other rights that journalists are allowed, and extends the legal and regulatory protection afforded financial journalists. However, this is not done lightly, and it's a de-facto recognition that proper investigative journalism is needed to hold to…
