But back to Super Retail. Court documents and a public slanging match have revealed a story more suited to a reality television drama, but with serious consequences for a multibillion-dollar retailer with more than 20,000 investors, according to Dean Paatsch, founder of governance advisory firm Ownership Matters.

“Even though the allegations read like an episode of Married at First Sight, they raise important governance questions that the board must answer,” he says.

“When did the board know of a relationship between the CEO and the head of HR? Did the head of HR return as a consultant to advise the board on the selection of the new chair, non-executive directors or otherwise after the board had received whistleblower complaints about her relationship with the CEO?”

Super Retail declined to comment, but it has previously pointed out that the allegations in the statement of claim are untested in court.

But the allegations in the statement of claim are not from a junior executive.

Rebecca Farrell, who is pursuing a settlement against Super Retail in the Federal Court, was the company’s most senior lawyer and head of compliance. It is a role that she says allowed her to be across all aspects of Super Retail to ensure it was complying with all of its requirements, including the Corporations Act.

The big issue for investors is the allegations of how the board turmoil reverberated through Super Retail’s workforce, staggering under the toll of the pandemic and its aftermath, as well as an unsustainable workload.

The statement of claim lays out allegations (which Super Retail denies) of a toxic workplace, made worse by the alleged bullying behaviour of Kelly, that many were afraid to report due to her close relationship to the CEO, and ultimately the chair, Pitkin.

As early as August last year, Farrell told Heraghty that Super Retail’s senior executives were preparing a dossier on Kelly’s alleged bullying and staff concerns that falling afoul of her would be career-ending for them, the court document says.

According to the statement of claim, these fears escalated after staff had reported in an internal Pulse survey conducted by Culture Amp in October 2023 that they needed a leader “not encumbered by personal relationships or [who] is egotistical or creates a different class for himself and those close to him”.

The alleged reply from Heraghty in relation to these concerns left no room for doubt as to where he stood on the matter: “If you’re not on the bus, then get off and go. You’re not welcome here.”

Apart from the staff’s fury, there are more serious allegations as well. Farrell says she was restricted from doing her job, which includes ensuring compliance with the Corporations Act, due to issues with Heraghty and Kelly that extended to board level. This included the removal of her access to board papers as far back as 2022, when Kelly’s redundancy was first discussed by the board, she says.

Farrell says her access to the whistleblower system was later removed, with the approval of Pitkin, after a second whistleblower complaint was received. That complaint specifically referred to concerns over a culture of bullying by Kelly and Heraghty, concerns over the alleged affair between Kelly and Heraghty and questionable expenses, and it referred to the close relationship they both had to Pitkin.

Farrell went on sick leave in December and never returned to work.

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These allegations are separate to the legal action launched by another of the retailer’s former senior legal officers, former company secretary Amelia Berczelly, which is still progressing. She was the first of the whistleblowers at Super Retail mentioned in court documents.

Pitkin told investors in its annual report last week that the board had investigated these allegations with external help and “the reviews and investigations concluded that none of the allegations were substantiated”.

She said the legal proceedings would be “vigorously defended”.

But a quick read of the annual report raises further questions.

A reference to the short-term incentives in the group’s remuneration report reveals that Heraghty’s $1.4 million bonus was meant to have been more than $200,000 higher, if not for a board review. This significant cut to his bonus was made after the board considered three factors. One of these was “the risk factors associated with the workplace litigation”.

Paatsch says Super Retail’s board will also have to explain why it docked the CEO’s pay over the litigation issue if its defence is so solid. “What risk factors are they referring to?” he says.

Perhaps the cut to the bonus could explain why Heraghty got so passionate on the conference call last week when the issue of corporate culture came up.

He went to great lengths, at the call, to point out that Super Retail’s engagement scores were well above global benchmarks, especially for its top leadership team.

“Retail is a team sport. We take development and the wellbeing of our team seriously. Our team is proud of these results, and they bloody well should be,” he said.

Paatsch will no doubt be advising major institutional shareholders what to make of the mess, which won’t be going away anytime soon.

Heraghty has so far declined to reveal just how much the legal battle is costing Super Retail, but the company appears to be committed to a legal scorched earth policy, which is unlikely to be cheap.

Last week, Super Retail appealed against a ruling by Justice Michael Lee to lift suppression orders on documents including details of the settlement it was negotiating with Farrell. The company is also proposing to challenge legal firm Harmers’ representation of Farrell in her Federal Court case, as well as its representation of Berczelly, if the latter’s case proceeds to the Federal Court.

Harmers might have more legal action pending as well. The firm said previously it was acting for four clients who were taking action as whistleblowers against the retailer within the Corporations Act. It has since confirmed this is still the case.

As for Super Retail’s investors, they will get their next chance to interrogate how the staff turmoil, and the legal imbroglio, plays out at the retailer’s annual meeting in Brisbane in October. It will be the last meeting for Pitkin as Super Retail’s chair, and arguably one of the more interesting ones she has had to preside over.

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