Is $37 million really worth it? A tipping point case

5/08/2010: Is $37 million really worth it? A tipping point case. When I first heard about the $37 million claim from David Jones PR girl Kristy Fraser-Kirk for sexual harassment; along with it came the gags. I am sure you heard a few too; that a mere uncomfortable touch of the bra strap was worth a cool $37 million. It's tempting to jump to the conclusion that a young girl is out to make a fortune; gold digger? A fuss over nothing? Grow up and get over it?

Fashion designer Alannah Hill announcing she fancied former CEO Mark McInnes and wished he'd touched her up, added to the circus.

It's tempting to comment; sure. But we could be wrong on all counts, so think again.

Point one, Fraser-Kirk is donating the money she receives for punitive damages a charity that supports people in the area of sexual harassment and bullying, so this is no gold digger. Or is she? Isn't $37 million excessive? And how will we know the money does go to charity if the case is settled out of court.

Point two, she is 25 years old. While I, at my age , have handled inappropriate verbal banter or behaviour from the opposite sex; a 25-year-old is less equipped. It's a terrifying, frightening and life-changing event in a young career. But my peers and I just dealt with it as a part of life. Whether in a bar or an office dealing with the opposite sex appropriately is a skill to be learned.

Point three (and really important) is that a company and brand such as David Jones has to walk the talk if it is to be truly believed by its customers as was pointed out by leading brand analyst Richard Sauerman of Brand Alchemy this week. If David Jones claims it is against sexual misconduct at work, it needs to see this through in its actions at head office, on the shop floor and at promotional events; even after a few drinks.

Four, if management, or worse, the board, claim they knew nothing about McInnes behaving inappropriately and yet they do have a log somewhere in the business of other complaints from young women, then the board has failed in its duty of care on a number of counts.

More than three quarters (78 percent) of David Jones employees are female including 65 percent of its managers. Two out of a board of nine are female. The board are reputable A-listers in business Robert Savage, Katie Lahey, Paul Zahra, Stephen Goddard, Reg Clairs, John Harvey, Peter Mason, Philippa Stone and John Coates.

The David Jones board have announced they will defend the claims vigorously.

The case is different because Fraser-Kirk argues that McInnes and David Jones should be liable under the Trade Practices Act for breaching the code of conduct. Fraser-Kirk has filed a statement of claim in the federal court alleging that McInnes had sexually harassed her at two company functions as well as four other unnamed David Jones staff.

Personally, I think McInnes was a very clever retail CEO; a dynamic young gun. I started my career in a highly selective management training program with UK retailer Marks & Spencer at age 18. Watching McInnes and the results he brought to David Jones, he was of the mould that makes success look easy. David Jones shareholders have benefited from his brilliance.

But this incident is proof it takes more than professional brilliance to make a great CEO. One must have the 'appropriate' package intact also. Respect for your fellow men or women and the ability to know when to stop.

Remember a large proportion of personal relationships commence in the workplace.

McInnes resigned immediately and voluntarily as a result of the issue with an apology and accepted a reduced payout.

At the time chairman Bob Savage announced, "Neither myself nor any other member of the board has had any reason to question Mr McInnes' behaviour before." It is this point that Fraser-Kirk is contesting.

"On this basis the board has formed the view that a breach of the company's code of ethics and conduct has taken place," the company said in a stock exchange announcement on McInnes' resignation.

So what are the takeaways from this?

• Live your brand and act it out.

• Don't push bad stuff under the carpet; face up and fix it.

• Work should be a safe place; women and men should be able to work without harassment or discrimination.

• For many of us past inappropriate behaviour, social or professional is part of growing up

• People make mistakes; we all do; own up and apologise when you need too.

And lastly, take heed of a new generation of well-educated young women who won't put up with behaviour that may have passed as being okay before now.

(to view the blog in Ninemsn click here)

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