True culture revealed at David Jones

by 12 Aug 2010

In her $37 million punitive damages claim against the retailer and its former CEO, Mark McInnes, Kristy Fraser-Kirk asserts that she is not alone in being sexually harassed by Mr McInnes and was subjected to several incidents when senior executives were present. This was news to the Board, apparently, whose chairman Robert Savage says it was ignorant of the CEO’s inappropriate behaviour towards female staff until Ms Fraser-Kirk’s claims came to light. Then it acted swiftly to accept its otherwise outstandingly successful CEO’s resignation and protect the brand.

As we have seen, that was an act of damage control that has got out of control, and the resignation, the reasons given and the legal claim have singled David Jones out like ‘no other store’ for being unprecedented in corporate Australia.

If what is reported in various media is true then clearly Mr McInnes’s behaviour was known about. At the time of his resignation he admitted behaving in a “manner unbecoming” to a female staff member at two company functions. But despite having processes in place did the David Jones culture inhibit reporting upwards to the Board and indeed prevent anyone from taking a leadership role to deal with the CEO’s behaviour? Did his very success in improving the company’s fortunes act as a break on anyone taking action to address the risk his behaviours presented to staff and the David Jones brand?

Organisations cannot rely on having policies, education programs and internal complaint response systems in place without the commitment of staff, and particularly senior staff, to abide by and enforce them. Arguably David Jones people may not have come forward due to the position and perceived power of the CEO and the fear or threat of victimisation. In the absence of all-round corporate courage a professional external and independent complaint management provider would have supported intervention strategies much earlier and facilitated a sustainable solution, prevented the loss of skilled people and damage to the brand.

It is highly likely that there is more pain to come in the David Jones case and that more complainants will line up behind Ms Fraser-Kirk. Mr McInnes and the company should prepare for more bad news while the Board and David Jones’ people and culture team ought to be thinking seriously about remediation matters. A specific culture and climate survey should be conducted as soon as possible to provide clear answers about what is really going on in the culture. Data gathered should be fed into a full review of complaint response systems and supporting policy. Leaders’ recruitment processes, performance management systems and KPIs should be reviewed to ensure they are aligned with the company’s preferred and required culture and values. Employees and shareholders have a right to feel safe and comfortable that David Jones is acting positively. It is in insufficient to describe this case as a one-off because the lack of authenticity around culture and values has been revealed.

Stuart King is the managing director of KWS Workplace Solutions Pty Ltd