Investor Prestige ≠ Investor Governance

“business. It seemed to me a shortcoming, which we ought to have tackled long before now, that we could have nominees on our board backed by great business names like Bernard Arnault and the Benettons, yet not benefit from their companies’ accumulated knowledge and experience. It would have been fantastic, for example, if the managing director of the LVMH Group, Myron Ullman, with all his hands-on experience, could have sat on our board. But our nominees were mostly ex-bankers in their early thirties who had little practical experience of having run a business.”

“first reactions soon arrived. At around 10 a.m., I gota call from Jean- Bernard Tellio of LVMH. He was in New York and wanted to meet for lunch. _ Kajsa and I found him in the downstairs restaurant at Barneys. ‘Did you see the article?’ I asked. He nodded cautiously. “Yes. There’s a bit of a problem.’ “What kind of problem?’ ‘Our PR people don’t like the headline,’ he said. He paused for a moment before continuing. “What I should probably have made clear to you is that LVMH isn’t technically an investor in boo.’ I grinned, assuming this was a joke. But his expression didn’t change. ‘The investment in boo was made with Bernard Arnault’s personal money, he went on. ‘It was his private company — Markas Holdings.’ ; This was news to us. We thought we had been dealing with LVMH from the start. Even Tellio’s business card had LVMH written on it. ‘It’s not that we don’t like the article,’ Tellio went on. ‘It’s great. But just try to play down the LVMH bit next time.’”