TY  - JOUR
AB  - The case opens with Martha Stewart's 2005 release from prison following her conviction for obstructing an insider-trading investigation of her 2001 sale of personal stock. The scandal dealt a crippling blow to the powerful Martha Stewart brand and drove results at her namesake company, Martha Stewart Living Omnimedia (MSO), deep into the red. But as owner of more than 90 percent of MSO's voting shares, Stewart continued to control the company throughout the scandal.The company faced significant external challenges, including changing consumer preferences and mounting competition in all of its markets. Ad rates were under pressure as advertisers began fragmenting spending across multiple platforms, including the Internet and social media, where MSO was weak. New competitors were luring readers from MSO's flagship publication, Martha Stewart Living. And in its second biggest business, merchandising, retailing juggernauts such as Walmart and Target were crushing MSO's most important sales channel, Kmart. Internal challenges loomed even larger, with numerous failures of governance while the company attempted a turnaround.This case can be used to teach either corporate governance or turnarounds.Students will learn:How control of shareholder voting rights by a founding executive can undermine corporate governanceThe importance of independent directors and board committeesHow company bylaws affect corporate governanceHow to recognize and respond to early signs of stagnationHow to avoid management actions that can make a crisis worseHow weaknesses in executive leadership can push a company into crisis and foster a culture that actively prevents strategic revitalization
VL  - 
IS  - 
SN  - 2474-6568
DO  - 10.1108/case.kellogg.2016.000079
UR  - https://doi.org/10.1108/case.kellogg.2016.000079
AU  - Shein James B.
PY  - 2017
Y1  - 2017/01/01
TI  - Corporate Governance at Martha Stewart Living Omnimedia: Not “A Good Thing”
T2  - Kellogg School of Management Cases
PB  - Kellogg School of Management
SP  - 1
EP  - 23
Y2  - 2024/04/23
ER  -