Is Stewart likely to resign from her companys board, or step down as chief executive?
Don’t count on it. While Stewart is the head of a public company, she still owns about 63% of Martha Stewart Living’s shares. And her alleged behavior, while distasteful, hardly ranks high on the abuse scale compared to the actions allegedly taken by officials at Enron or Tyco. Nobody has accused her of mismanaging her own company, or engaging in corruption. Even if she were to be found guilty of lying to prosecutors, the question for investors is whether the company will fare worse if she’s gone or if she stays at the helm. Chances are they will decide that the latter is preferable. If not, she can always try to take the company private. Q: How much will her brand really suffer because of this? A: To some extent, of course, that depends on the final outcome. It’s highly unlikely that beleaguered Kmart (KM ), now under Chapter 11 protection, will pull all those Martha Stewart Everyday products off the shelves. Some consumers — perhaps in sizeable numbers — may now boycott those Marth
