Mother’s $600,000 Chevrolet campaign triggers SEC conflict of interest inquiry

These days, General Motors advertising seems more adept at making the headlines than selling metal.

Yesterday, GM was forced to report to the Securities and Exchange Commission, which regulates the corporate governance of publicly-quoted companies, that it had inadvertently awarded a $600,000 ad contract to an agency where the wife of GM’s chief financial officer, Dan Ammann, is a partner.

The agency in question is Mother New York, and the brief was Chevrolet’s 100th birthday anniversary (see below), which ran last autumn. Ammann’s wife, Pernilla Ammann, is both a partner and chief operating officer at Mother New York.

Apparently, evidence of a conflict of interest only “popped up” last week when the governance committee of the board of directors was reviewing GM contracts.

GM directors are contractually required to disclose personal ties to outside companies, which Dan Ammann signally failed to do.

Now, I know what you’re going to say. How could GM have committed such an obvious oversight? The clue’s in the name, isn’t it? “Ammann”, on the Mother head sheet, partner, pretty unusual, sounds a bit like our CFO’s. Could they by any chance be related?

But of course, bureaucracies (which is what all multinational companies are) don’t work like that. They don’t make lateral connections; they function efficiently only in silos. So, though it took GM a long time to recognise the oversight, and though the oversight is worrying in itself, the fact that it happened should not surprise us.

What I’m more interested in is what Mrs Ammann was doing all this time (apart from keeping mum). Did she never mention over the K Flakes: “Honey, the strangest thing happened. Your company has just offered our agency a nice little advertising brief”? Admittedly she may not have worked on the brief, but she must have known about it. It would have been irresponsible of an agency COO not to have. After all, one of her jobs is to handle legal issues and “contract negotiations”, according to the agency website. One thing is for certain: she can hardly have been so naive that she didn’t know what constitutes a conflict of interest.

Maybe she’s estranged from her husband. Maybe she doesn’t talk to him at breakfast, or at any other time. In which case, I think we should be told.

In any case, there’s always email.


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