Powerfrauen Take Control
A few years ago, Liz Mohn attended high-level meetings at Bertelsmann with her husband, Reinhard Mohn, patriarch of the media company's controlling family. "Sometimes she sat at the table, but she never said a word," recalls someone who has been associated with Bertelsmann for years. "Now," the person adds wryly, "she's talking."
Indeed. In July, Liz Mohn was the one who told CEO Thomas Middelhoff that he no longer had the trust of the Mohn family, precipitating Middelhoff's resignation. In the job shuffling that followed, Liz Mohn emerged as chairman of Bertelsmann Administration Company, which exercises control over 75% of Bertelsmann's closely held shares. A former Bertelsmann secretary who by some accounts caught Reinhard's eye while playing musical chairs at an office party, Liz Mohn, now 61, arguably is the most powerful person at the publisher, which owns properties such as Random House books and broadcaster RTL Group.
The Germans have coined a word--half-English, half-German--for women such as Mohn: die Powerfrauen: Power Women. In a country where women still hold few positions of corporate clout--and where marriage is sometimes a woman's only path to the boardroom--Mohn and other Powerfrauen are starting to make waves. That's especially true in the media: Axel Springer, the company that publishes Bild, the nation's most widely read paper, is now controlled by a woman, Friede Springer, widow of its founder. And to the dismay of male execs, these women aren't going away.
The power wives are in the thick of some of the biggest German corporate battles going. Mohn is leading an effort to reassert family control over Bertelsmann and put the brake on plans for the company to go public. Friede Springer is locked in a struggle with ex-media mogul Leo Kirch over the future of the Springer empire. In the aftermath, Friede Springer, 60, could even emerge as part owner of much of what's left of Kirch's largely bankrupt TV and film empire. "You could say Mohn and Springer only got there because they married the right person, but I think it's impressive the way they have grown into the roles," says Christiane zu Salm, CEO of Nine Live, a Munich-based viewer-participation channel. "It shows what women can do."
The two women aren't the first to make the transition from loyal wife to Powerfrau. After the death of industrialist Herbert Quandt in 1982, his third wife, Johanna, exercised discreet but firm control over auto maker BMW, in which the family holds a 46.6% stake. Now, Johanna's children, Stefan Quandt and Susanne Klatten, represent the family's interests on BMW's supervisory board.
Another example is Princess Gloria von Thurn und Taxis, a 42-year-old former waitress who surprised the German financial world by returning the family holdings to profit after her husband died in 1990. The princess literally sold some of the family silver to pay a $390 million tax bill, as well as holdings such as a brewery. Then she focused on forestry to leverage the family's vast real estate holdings. Today the once-indebted kingdom, which was inherited by her son, Albert, but managed by the princess, is valued at $1.4 billion.
But it is in media where the Powerfrauen are having the most impact. Both Mohn and Springer were decades younger than their husbands and supplanted an earlier spouse. Liz Mohn gave birth to three children by Mohn before their 1982 marriage. Springer, who met Axel while caring for one of his children, was the fifth wife of the publisher, who died in 1985. Although Friede Springer keeps a low profile, she puts in a full workday at the Berlin office once occupied by her late husband, which she keeps much as he did, down to the Oskar Kokoschka drawing on the wall and fresh flowers on the desk. Friede controls slightly more than 50% of the company shares, and she's the one who makes the key decisions. For example, Springer CEO Mathias Döpfner was her handpicked choice, insiders say.
The question is whether Mohn and Springer will have a positive influence. Some male media watchers worry that they will focus on preserving the family legacy and shy away from the risky moves needed for growth. "Both are by definition conservative and not very expansionary," says one man who knows them both. But others say Mohn and Springer know enough to leave most of the decision-making to their top managers. "If the CEO wants to take a risk, she [Mohn] will go along," says Helmut Thoma, a former Bertelsmann TV executive who now is media commissioner in the state of North Rhine-Westphalia.
Springer has made headlines this year because of her thorny relationship with Leo Kirch. Springer helped force KirchMedia into bankruptcy earlier this year by calling in a $744 million debt. But Leo Kirch still owns 40% of Axel Springer, which he is trying to sell to a rival publisher.
But Friede is striking back. In an alliance with Kirch creditor Deutsche Bank, she is trying to force sale of the stake on the bourse to end infighting among shareholders. Through it all, Friede has kept her composure even when Kirch tried to provoke her. During a shareholders meeting in June, for example, he sat next to her and condescendingly held her hand.
But the woman who has really set the gossip mill spinning is Mohn. In retrospect, it's clear her power has been building for years. Mohn has a prominently marked office at Bertelsmann headquarters in Gütersloh, Germany, and a phalanx of secretaries. Earlier this year, she played hostess to guests including Chancellor Gerhard Schröder and AOL TimeWarner Inc. CEO Stephen M. Case at a conference in Berlin sponsored by the Bertelsmann Foundation, the charity that owns a majority of Bertelsmann. That seemed like standard wifely stuff, until Mohn made her influence clear by helping to engineer Middelhoff's ouster. And she is sure to play a key role in selecting his permanent successor. Gunter Thielen, who postponed a retirement party to accept the job, is expected to serve only a few years.
German men don't seem quite sure what to make of the Powerfrauen. When Chancellor Gerhard Schröder thought he was being unfairly treated by Springer's Bild, his wife, Doris Schröder-Köpf, wrote the letter of complaint to Friede. The unintended message: Women should talk to women.
Traditionally, German widows have usually wound up with money but no power. Take Chantal Grundig, widow of entrepreneur Max Grundig. Hired in the 1970s as a family French tutor, Chantal and Max were married after she became pregnant. Before his 1989 death, Max Grundig arranged for the sale of the consumer-electronics company that bore his name, leaving his widow an estimated $680 million but little managerial control.
Maybe that was a mistake. Chantal couldn't have run Grundig any worse than the men who have since helped make it a money-loser. But power wives now have their chance to run the show. And Germany's boardrooms may never be the same.
By Jack Ewing in Frankfurt