Bertelsmann Chairman Quits After Boardroom Clash

20 November 2003

Following a flurry of tense boardroom confrontations, Bertelsmann Group's chairman Gerd Schulte-Hillen quit the media giant's supervisory board Wednesday evening.

His departure is said to have been accepted by the board, including directors representing the Mohn family which controls 75% of Bertelsmann's voting rights.

Triggering the abrupt exit were a series of bruising clashes with Bertelsmann chief executive Gunter Thielen earlier that day, each toe-to-toe over several deals -- among them the group's recent unsuccessful $500 million bid for Time Warner's books unit and its current negotiations with Sony for a collaborative music venture.

One insider told the Financial Times: "The trust had broken down between the supervisory board chairman and the chief executive." The informant also revealed that Schulte-Hillen was accused by some board members of trying to slow down deals and reverse acquisitions already agreed by the board.

It would seem that high office within Bertelsmann is concomitant with high risk. Schulte-Hillen's egress is the latest in a string of senior executive departures, among them former group ceo Thomas Middelhoff; Klaus Eierhoff, head of Bertelsmann's DirectGroup; and Didier Bellens, boss of the group's RTL broadcasting unit.

The upheaval appears to consolidate the power base of chief executive Thielen, said to be eager to conclude the Sony deal after his departed adversary had voted against it. Given the events of Wednesday night, he is unlikely to meet with further opposition.

Data sourced from: Financial Times; additional content by WARC staff