‘Inadequate oversight’: Super Retail chair cops stiff protest vote

4 hours ago 2

Super Retail Group chairwoman Judith Swales has survived a stiff protest vote from investors seeking answers on the sacking of former chief executive Anthony Heraghty, as she pointed to improving trust and encouraging a safe workplace environment as an “absolute focus” for the retailer.

Heraghty’s secret relationship with the head of HR Jane Kelly plunged the $3.7 billion retailer into a multimillion-dollar legal stoush. On Thursday, Swales blamed the board’s decision to stand by Heraghty on the advice it received from an external law firm that had “thoroughly investigated” the matter and found “none of the allegations are substantiated”.

Super Retail Group’s incoming chief executive Paul Bradshaw and chairwoman Judith Swales at the company AGM in Brisbane on Thursday.

“We engaged an external law firm who undertook the investigation and we acted, we relied on that,” Swales told shareholders at the company’s annual general meeting in Brisbane. “As a board, we have been united.”

The operator of Rebel Sport, Supercheap Auto, BCF and Macpac defended Heraghty for over a year after two of the company’s top executives – former chief legal officer Rebecca Farrell and former company secretary Amelia Berczelly – launched Federal Court proceedings alleging bullying, harassment, and suppression of whistleblowing attempts.

“There is no safe space to speak up,” a member of the executive leadership team told a company survey in October 2023, according to court documents.

In response to a shareholder question about confidence in whistleblower protection, Swales insisted the company had “a really strong culture”.

“We take whistleblowing really seriously, but it’s culture that really is important, which is where people feel they can speak up, they can be heard and they can be respected, and they feel safe to do so, and that is an absolute focus,” she said.

Heraghty’s employment was abruptly terminated last month after the board learnt of new information that Swales said was “beyond disappointing”. Days later, the Federal Court proceedings brought by Berczelly and Farrell were settled for an undisclosed sum.

“Of course, had we known that, we would have acted very differently at the time, and that was information that was not obtainable by the board. It did not reside on company records.”

The Australian Securities and Investments Commission (ASIC), the corporate watchdog, is investigating Super Retail and the circumstances that led to Farrell and Berczelly suing the company.

“There is an ongoing legal process with ASIC … I can’t comment on that,” Swales said.

now-sacked CEO Anthony Heraghty and Super Retail chairwoman Judith Swales, who has held on to her job.

She also confirmed that another former Super Retail lawyer, Renai Williams, had commenced action through the Fair Work Commission over allegations the retailer took unlawful action against them.

Swales has survived in her role as chairwoman despite suffering a 25.1 per cent protest vote against her after three of the four influential governance advisory firms recommended against her re-election.

“This director is accountable for oversight of the former CEO and legal issues over this period,” stated a report from proxy adviser Ownership Matters advising against Swales’ re-election.

“There was inadequate oversight over senior management and company strategy, legal strategy and the company’s whistleblower program.”

Company director Colin Storrie said Swales had the “full confidence and unconditional support” of the board.

Removing the voting stake of company founder Reg Rowe, who retains a board representative in Mark O’Hare, more than 42 per cent of shares voted landed against Swales.

Super Retail’s share price slipped 4 per cent in the session.

Swales also confirmed the retailer was seeking legal advice on whether it could claw back further benefits received by Heraghty last month just prior to his sacking. The company has already cancelled share rights and bonuses worth $7 million, including a $620,000 cash bonus that was due to be paid late last month.

Just eight days before his termination, Heraghty was awarded shares related to his short-term incentive bonuses for 2023 and 2024 worth $495,000, according to CGI Glass Lewis.

“Had his departure taken place only days earlier, these awards would have lapsed under the bad leaver provisions applied by the board,” the proxy adviser said in its report.

Allegations against Heraghty included screaming at staff so vehemently that he was spitting on them, and international trips to further his alleged secret relationship with Kelly.

Replacing Heraghty as group chief executive is BCF’s managing director, Paul Bradshaw, who will step into his new role on November 1.

“As CEO, my focus will remain steadfast on delivering value for our customers, supporting our team. Every one of them,” Bradshaw said in the meeting’s closing remarks.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.