By Paul Sandle(Reuters) - Elisabeth Murdoch urged the media industry on Thursday to embrace morality and reject her brother James's mantra of profit at all costs, in a speech seen as an attempt to distance herself from the scandal that has tarnished the family name.
Addressing television executives, she said profit without purpose was a recipe for disaster and the phone hacking scandal at the News of the World tabloid - which has badly hurt her father Rupert Murdoch's News Corp empire - showed the need for a rigorous set of values.
The comments from a woman who has powerful friends in the British establishment and the support of her PR husband Matthew Freud, are likely to be examined for whether she could one day run News Corp instead of her brothers whose chances have faded.
"News (Corp) is a company that is currently asking itself some very significant and difficult questions about how some behaviors fell so far short of its values," she said in the annual television industry MacTaggart lecture.
"Personally I believe one of the biggest lessons of the past year has been the need for any organization to discuss, affirm and institutionalize a rigorous set of values based on an explicit statement of purpose," she said in remarks which drew applause.
Elisabeth Murdoch - a successful television producer who was overlooked for senior jobs at News Corp that went first to her brother Lachlan and then James - said a lack of morality could become a dangerous own goal for capitalism.
Rupert Murdoch last year closed the News of the World, which was owned by a News Corp unit, amid public anger that its journalists had hacked into the voicemails of people from celebrities to victims of crime. A number of former executives have appeared in court over the case and the government set up a judicial inquiry into press standards.
"There's only one way to look at this," Murdoch biographer Michael Wolff told Reuters. "This is part of a strategic repositioning of Liz Murdoch within the media world, with the business world and within the family."
The often humorous lecture delivered at the annual Edinburgh Television Festival came three years after James Murdoch used the same platform to confront a largely hostile audience with his vision for the industry.
Elisabeth, 44, and 39-year-old James had been very close, according to sources close to the family, but their relationship became strained by the hacking affair.
"Writing a MacTaggart (lecture) has been quite a welcome distraction from some of the other nightmares much closer to home. Yes, you have met some of my family before," she said to laughter, in a rare speech for the founder of the successful television production company Shine.
Stewart Purvis, the former head of broadcast news provider ITN, said on Twitter that the speech should be called "Why I am not my father or my brother".
Her highly personal speech appeared designed to win over any doubters, with references to childhood conversations at the breakfast table with dad to her continuing affection for the much-loved British playwright Alan Bennett.
She even lavished praise on the state-owned BBC, previously the butt of jokes by her brother but which also regularly airs programs made by her Shine company.
RECIPE FOR DISASTER
Referring to her younger brother James's 2009 speech, Elisabeth said his assertion that the only reliable, durable and perpetual guarantor of media independence was profit had fallen short of the mark.
"The reason his statement sat so uncomfortably is that profit without purpose is a recipe for disaster," she said.
"Profit must be our servant, not our master," she added. "It's increasingly apparent that the absence of purpose - or of a moral language — within government, media or business, could become one of the most dangerous own goals for capitalism and for freedom."
British tabloids have been accused of producing ever-more salacious stories before the scandal broke in an effort to maintain circulation. Rupert Murdoch admitted that the scandal had left a serious blot on his reputation.
The sharp change in tone, with its emphasis on personal responsibility, underlined how much had changed since James Murdoch used his own MacTaggart lecture to accuse the BBC of having "chilling" ambitions.
That speech, delivered in his role as chairman of the pay-TV group BSkyB and head of News Corp in Europe and Asia, consolidated James's position as heir apparent to his father's role. It also echoed Rupert Murdoch's own 1989 speech that broadcasting was a business that needed competition.
Since then, both men have been chastened by the fallout of the phone hacking affair.
At the height of the scandal News Corp had to halt a $12 billion bid to buy the rest of BSkyB it did not already own, angering investors and sowing doubts as to whether James had what it took to run the $55 billion empire.
News Corp announced in June that it was splitting off its newspaper business.
While brother Lachlan was often pictured with the family last year, Elisabeth stayed in the background. Lachlan stood down from his role as News Corp deputy chief operating officer in 2005 after clashing with senior executives.
Now James Murdoch's fall from grace has turned the spotlight onto Elisabeth in the long-running debate over who will one day replace their 81-year-old father at the head of the company.
"I think she was trying to put her mark on where she had come from and where she fits in," Enders analyst Toby Syfret told Reuters after emerging from the speech. "She made it clear where she didn't agree with James, and she made clear the things about her father that she admired.
"From a political level it was quite interesting."
Stressing her links to her father and the vision he espoused when he built his company over 60 years ago, she spoke in glowing terms of his 1989 speech.
"A quarter of a century later, I am still wholly inspired by those words and they are still deeply relevant today," she said. "I understood that we were in pursuit of a greater good - a belief in better."
(Writing by Kate Holton; editing by David Stamp)