Forbes has removed its long-time chief content officer Randall Lane after the publication learned that he received a secret payment of approximately $6 million from RJ Shook, founder of Shook Research, a firm that has been working with Forbes for years.
Forbes discovered the payment earlier this year and dismissed Lane in July. The reason for the payment is unknown. Lane viewed the money as a personal gift from Shook, whom he had known for years, but did not disclose the payment to Forbes.
The relationship between Lane and Shook seems to have developed over a long time. They became especially close in 2013 after a humanitarian trip to Liberia organized by Forbes. Their personal relationship has grown over the years when Shook Research was professionally associated with the magazine.
One person who was familiar with their relationship said Lane eventually became an unofficial adviser to Shook. The link is significant because Shook Research has worked with Forbes on rankings and other editorial products, especially in the wealth-management industry. Such a relationship also had the potential for conflict of interest, especially if a senior Forbes executive had a personal financial relationship with the founder of a company doing business with the publication.
The payment came to light after private equity firm PPC Enterprises acquired Shook Research. In a review of company emails, new management discovered information about the transaction and brought it to Forbes. The discovery led to an internal review and Lane’s dismissal.
Forbes’ own internal policies also seem to have been conflicted, the Times report says. In the company’s employee handbook the employees must obtain approval before engaging in outside business activities. That also prevents employees from personally benefiting from business activities associated with Forbes.
Lane, 58, admitted to taking the money but he said he failed to disclose it. He said in a statement that the payment was a gift and that he should have disclosed it to the company.
Forbes confirmed Lane's departure to the Times but declined to comment on the payment itself. Shook Research also declined to comment on the matter.
The episode was particularly interesting because Lane had been a prominent player at Forbes for a long time. As chief content officer he was intimately involved with the publication’s editorial operations and its high-profile rankings, lists and business coverage. So his departure is a transformational change at the time Forbes is in transition in the media and publishing space.
The controversy comes as Forbes' business model is under greater scrutiny. The publication has been turning to rankings, lists and commercially connected editorial products to survive financially as the media sector gets more and more financially squeezed in recent years.
For a publication whose reputation is closely tied to business credibility and the evaluation of influential companies and individuals, the undisclosed payment raises hard questions about editorial independence. Even if Lane saw the money as a personal gift, the size of the payment and its connection to the founder of a company that worked with Forbes created circumstances in which disclosure was particularly important.
The incident illustrates why transparency rules are so important for journalism. Senior editorial employees have access to sensitive information and influence over coverage, rankings and alliances. Financial relationships that remain undisclosed can undermine confidence in the independence of that work, regardless of whether that payment directly influenced any particular editorial decision.
Lane has been dismissed and Forbes will have to make sure that its internal controls are in place and it would have to deal with any potential conflicts that might be between senior staff. The case also helps media organizations to remember that personal relationships get complicated when they are related to commercial partnerships, especially when big money is involved.
Forbes, founded more than a century ago by the Scottish journalist B.C. Forbes, built its reputation around business journalism and entrepreneurship and coverage of wealth and influential business leaders. Lane’s affair would be a sharp contrast to that philosophy and would heighten the scrutiny of how the publication manages editorial and outside financial relationships.
