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The company has denied the accusations and said it had conducted a review and an external investigation after which it determined that there was nothing to see here.
Doing so exposes the board to some serious risks. If the legal action reveals more incidents of poor behaviour or bullying, or if Farrell is successful in winning a sizable financial outcome, it could infect the professional standing of directors.
Legal action remains a cloud over Rebel Sport owner Super Retail Group. Credit: Fairfax Media
Increasingly, boards have become disinclined to “stand by their man” in the face of bullying or harassment allegations against C-suiters.
Shareholders don’t like being associated with companies that have any whiff of tainted ESG issues.
But all the drama moved to the background on Thursday as attention turned to running shoes, yoga mats, fishing tackle, tents, backpacks and automotive lubricants and how Super Retail managed to keep like-for-like sales steady for the 2024 financial year in the face of a retail recession.
Sally Pitkin, the outgoing chairman of Super Retail Group.
Sure, earnings went backwards by around 10 per cent, but discretionary retailers that have reported 2024 results have all struggled to deal with customers hit by the cost-of-living crisis.
And Super Retail shareholders received a shot of sugar with a special fully franked dividend of 50¢ – on top of the ordinary 37¢ dividend payment.
The additional dividend certainly implies that the company is confident in future earnings – an outcome that is supported by the first seven weeks of trading since the new financial year in which group sales have bounced to be ahead 3 per cent on a like-for-like basis.
But the halo effect of a better-than-expected financial performance has its limits.
The legal action on foot remains as a cloud over the company that could become more threatening after suppression orders covering partially redacted documents filed by Farrell were lifted but remain in place pending an appeal by the company.
In the toss-up, my money is on the governance mess.
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