Donna James surviving a boardroom coup is being celebrated as a victory for corporate governance, but as usual, the media is ignoring the immense emotional toll this takes on the activist investor.
I was frankly appalled to read the news out of the Victoria’s Secret annual meeting this week. Donna James has been re-elected as chair, successfully fending off a spirited, necessary, and completely normal campaign by Australian billionaire Brett Blundy to have her removed. The financial press is framing this as a triumph of corporate stability. But as I read the headlines from my veranda in Double Bay, I couldn't help but feel a profound sense of sorrow for Brett.
What we keep missing in the Victoria's Secret boardroom saga is how hard it is to be a billionaire who is suddenly told "no" by a woman in retail. I have shared several mineral waters with men in Blundy’s tax bracket, and let me tell you, the psychological burden of not being allowed to dictate the global supply chain of lace thongs is heavy. Blundy simply looked at a legacy American undergarment brand and decided, quite rationally, that what it really needed was the firm, guiding hand of a sixty-four-year-old Australian man holding a massive block of shares.
To call his takeover bid a "coup" is to fundamentally misunderstand the nature of modern activism. When a billionaire attempts to oust a female chairwoman of a lingerie empire, he is not doing it for ego or control. He is doing it because he inherently understands women's needs better than the board does. Blundy’s extensive background in acquiring equity uniquely positioned him to tell Donna James to pack up her desk. Instead, the shareholders chose continuity, effectively slamming the door in the face of a man who just wanted to be the supreme, unquestioned authority over millions of brassieres.
I have not seen Blundy's specific slide deck for the future of the brand, but having sat on several panels about synergy with men of his exact demographic, I can comfortably guess its contents. It likely involved a bold, disruptive strategy of replacing the current leadership with himself. This is the kind of outside-the-box thinking that legacy brands desperately need.
If we do not allow our most wealthy men to assert dominance over the structural engineering of women's undergarments, what exactly is the point of acquiring capital?
The chilling effect of James’s re-election cannot be overstated. Tomorrow, another billionaire might see a women's apparel company and decide he ought to be in charge of it, only to hesitate, paralyzed by the fear that the existing female leadership might successfully defend their jobs. We are sending a dangerous message to the market. If a man with a massive net worth cannot simply point at a lingerie brand and demand the immediate termination of its chairwoman, I fear for the future of free enterprise.