Ownership Matters boss Dean Paatsch raises concerns about corporate governance fails
A top governance adviser has compared allegations of the CEO’s affair and a toxic workplace with the mayhem of reality TV show Married At First Sight and says the board must answer questions.
The nation’s most influential corporate governance adviser, Ownership Matters boss Dean Paatsch, is demanding Super Retail Group chairman Sally Pitkin answer allegations of serious governance failures at the retailer, including that its former head of Human Resources was hired to advise the board on picking the next chair despite her allegedly being in a relationship with the CEO.
Mr Paatsch believes the scandalous saga that has now engulfed Super Retail, which owns Rebel, Supercheap Auto, Macpac and BCF, looks increasingly like a trainwreck “Married at First” episode. Claims of an affair, suspicious overseas travel, and screaming matches at meetings where the CEO allegedly spat on executives as he yelled are all publicly aired in court documents.
Mr Paatsch, who has the ears of the country’s largest superannuation funds and funds managers, is more broadly concerned about the power Super Retail CEO Anthony Heraghty seems to wield over the board, led by Ms Pitkin, who allegedly ignored countless complaints – both formally from executives and by whistleblowers – about the company’s toxic workplace environment and alleged breaches of corporate governance guidelines.
These complaints outlined in court documents include that the former head of HR, Jane Kelly allegedly engaged in bullying and harassment and a generous redundancy offer turned into a paid consultancy – all at a time when she was also claimed to be having a secret affair with Mr Heraghty.
“We have serious concerns about corporate governance issues at Super Retail,” he said.
Mr Paatsch said he was keeping an “open mind” at this stage about the advice he gives to clients on how to vote at the Super Retail annual meeting later this year.
The scandal around Super Retail, which first broke in April, worsened on Friday when court documents revealed startling claims about the allegedly toxic workplace blanketing the company’s most senior executive ranks and which Mr Heraghty and its board were made aware of.
The court documents claimed Mr Heraghty’s executive assistant resigned in October 2023 because of the CEO’s alleged secret relationship with Ms Kelly after having been informed by the CEO’s ex-wife of the affair and, and as the court document states, “observing questionable expenses, travel arrangements and the like in relation to the CEO and (Ms Kelly)”.
It was also alleged Mr Heraghty misused the travel budget to further carry on that affair, had screaming matches with aggrieved staff and ignored many complaints about Ms Kelly’s behaviour.
The board was allegedly made aware of improper workplace allegations including the affair and its deleterious impact on executives and the corporate culture.
“Even though the allegations read like an episode of Married At First Sight, they raise important governance questions that the board must answer,” Mr Paatsch said to The Australian.
“When did the board know of a relationship between the CEO (Mr Heraghty) and the head of HR (Ms Kelly)?”
Allegations were revealed on Friday in court documents that Ms Kelly was made redundant on December 15, but then immediately was rehired – despite staff and whistleblower complaints about her behaviour and the alleged secret affair – to become a paid consultant to specifically help select a new chairman upon Ms Pitkin’s planned departure later this year, as well as find new directors.
Mr Paatsch said he has had many discussions with his clients about Super Retail’s corporate governance and actions of directors since the scandal first broke in April, as investors raised their concerns.
This was before a statement of claim lodged by the sacked Super Retail chief legal officer, Rebecca Farrell, was made public on Friday and that laid bare a string of sensational allegations.
Ms Farrell’s statement sheds light on a series of alleged corporate governance failures stretching back years, and of which the board – led by Ms Pitkin – was allegedly made aware of on many occasions through a number of channels.
This included senior executives and staff feeling unable to speak their mind about the toxic environment at Super Retail because of too much “nepotism” around the CEO and his head of HR.
The former chief legal boss for Super Retail also claims in her case against her former employer – which also names Mr Heraghty, Ms Pitkin and director Annabelle Chaplain as respondents – that she was suffering from harassment, bullying, was blocked from viewing key board papers and that Mr Heraghty intervened to influence the redundancy deal Ms Kelly was offered.
A spokesman for Super Retail on Friday said: “We do not accept the untested allegations that are set out in the statement of claim. As previously announced, Super Retail Group will vigorously defend the court proceedings in relation to these matters.”
Ms Pitkin will be stepping down as chairman at the company’s AGM later this year. She was unavailable for comment.
R.M. Williams digs heels in over Adelaide rental dispute
R.M. Williams is facing a legal stoush in its spiritual home of Adelaide with its former landlord taking it to court for about $200,000 in disputed rent and other costs.
Gupta’s woes spread to NSW as coal workers stood down
Workers at Tahmoor Coal in NSW have been stood down on full pay and production curtailed, as rumours swirl that Sanjeev Gupta’s debt worries have spread beyond Whyalla.