Offer to oust Boohoo co-founder from board role canceled
The co-founder of fast fashion giant Boohoo, headquartered in Manchester, survived a shareholder attempt to remove her from the retailer’s board of directors.
The attempt to oust Carol Kane, who had the backing of high-profile groups, followed a scandal over the working conditions of the people who make Boohoo’s clothes.
Yet nearly 12% of the votes cast by shareholders were in favor of removing Ms Kane from her post as executive director, for which she was paid nearly £ 1.4million last year, reports l PA News news agency.
The vote to re-elect Ms Kane to her post was expected, but with influential shareholder advisory group Glass Lewis backing the removal, it was not entirely certain.
More than 20% of shareholder votes were also cast against the company’s compensation report, which handed over £ 5.5million to Boohoo’s four executive directors.
Boohoo said, “The board is delighted that shareholders have recognized Carol’s important and very specific role on the board with a very strong vote in favor of her.
“The Compensation Committee recognizes that the vote of 79.80% in favor of the Compensation Report represents a significant improvement compared to last year.
“The Compensation Committee looks forward to continued engagement with the group’s shareholders as it continues to shape the group’s future compensation policy. “
The vote took place Friday at Boohoo’s first annual general meeting in a series of bad publicity about conditions at the company’s suppliers.
According to reports, some Leicester workers were paid less than minimum wage and worked in poor conditions, while making clothes that ended up in Boohoo warehouses.
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To outperform the competition in terms of speed of delivering new styles to customers, Boohoo has invested heavily in its UK supply chain.
But the company also attracts customers by offering competitive prices, which puts pressure on its buyers to find clothes it can sell at low prices.
A review by Alison Levitt QC, which was commissioned by Boohoo, found that 35 of 49 suppliers failed a minimum wage investigation.
He also found poor conditions “in the best part, if not all” of Boohoo’s supply chain in Leicester, including some “serious health and safety violations”.
The bad publicity sparked a series of changes at Boohoo, which said it was on track to crack down on bad practices in its supply chain. Still, the claims have been met with skepticism.
“Despite Boohoo’s so-called Agenda for Change, the company’s high-speed, low-cost business model continues to generate labor rights violations in its supply chain,” said Martin Buttle, of the group. ShareAction pressure.
“This is a major concern not only for workers and society, but also for investors who recognize the financial impact of poor labor relations and damage to reputation.”
He said investors should engage with Boohoo to improve labor standards for the people who make his clothes.