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David Jones: public relations 1, common sense 0

By Jonathan J. Ariel - posted Friday, 25 June 2010

When it comes to whiffs of sexual harassment, the contrast between what is considered stellar behaviour by an upstanding corporate citizen and what actually is the right thing to do, grows sharper by the year. Unsurprisingly, in the case of Australia’s finest retailer David Jones, the unanimous focus - of the board and many in the media - has been one of protecting the brand. At all costs it would seem. Even, at the cost of common sense.

Whether it’s the voracious appetite of plaintiff lawyers, a politically correct board of directors, or dumb as fencepost journalists, David Jones seems to have lucked out big time. Even though, when they look in the mirror, the board members collectively consider themselves victorious. Go figure.

If we believe the media, David Jones has lost a brilliant strategist who boosted the share price by more than 300 per cent since he first reported to work at head office. The firm faces a heavy payout to the victim of the alleged sexual harassment and it has suffered a small dent to its reputation. Its workforce and customers, the large majority of which are women have been sorely disappointed and its shareholders must now find the time each Sunday to pray that Mr Mark McInnes’ replacement, Mr Paul Zahra, will be faithful to St Mark’s retail gospel.


The public know something undignified went on between Mr McInnes and Ms Kristy Fraser-Kirk, a young woman working in the marketing department. At least twice. But we don’t know exactly what. Was it an uncalled for kiss or was it something closer to lecherous behaviour? And the longer it takes the David Jones board to air its dirty laundry, the smellier it will get. To date, we have no idea just how much Ms Fraser-Kirk’s able counsel are rattling their can for.

In the media’s haste to hang Mr McInnes and in due course draw and quarter him the essential questions were ignored.

First, what exactly did the alleged perpetrator, Mr McInnes do?

Second, what will it take for the alleged victim of the sexual harassment, Ms Fraser-Kirk to “move on” i.e. to recognise justice has been done?

Third, what good does it do to have Mr McInnes depart the CEO’s stage at David Jones?

Surely Job #1 is to compensate the victim fairly. Only after she is compensated can she possibly “move on”. And the matter be finalised. Tossing Mr McInnes out the door maybe great public relations, but apart from the stockholders of David Jones’ chief rival, Myer Ltd, I don’t see anyone benefitting from his departure. After all, McInnes worked miracles for the firm’s stockholders. He dragged the company from bleeding $25 million a year to making $150 million profit last year. Does it make any sense to excommunicate him?


While it’s true that the Chairman of David Jones, Mr Robert Savage, received a great many pats on the head for doing more than what was expected and offering the scalp of the alleged offender, many in the media ignorantly cheered the David Jones board for clawing back McInnes’ long-term performance bonus share portfolio worth $15 million. As though that was “teaching McInnes a lesson”. B*llocks. A close examination of the facts would reveal that to be entitled to that bonus pie, McInnes would still have to be CEO in October 2011. So in fact, David Jones wasn’t teaching anyone anything. Apart from how to spin your way out of trouble I guess.

Soon Ms Fraser-Kirk will be compensated. After which she must decide whether or not to forgive the perpetrator. There can be no middle ground to this decision: either she decides to forgive Mr McInnes, or not.

Not forgiving, in other words, holding on to bitterness and anger can cause problems of their own. Forgiving, but not necessarily forgetting, is a crucial part of the healing process.

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About the Author

Jonathan J. Ariel is an economist and financial analyst. He holds a MBA from the Australian Graduate School of Management. He can be contacted at

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