Howard Smith — a 19-year veteran of Ralph Lauren Corp. who rose up the ranks to executive vice president and chief commercial officer — resigned under pressure after a board investigation found he had violated the firm’s code of business conduct and ethics.
The company said in a filing with the Securities and Exchange Commission that Smith was stepping down immediately with the resignation becoming effective April 2. The filing did not specify the nature of the misconduct uncovered by the board’s audit committee and outside counsel, but said the resignation was “unrelated to the company’s financial reporting and business performance.”
Smith did not immediately reply to a query sent to his LinkedIn account.
A source familiar with the situation said the violations were not related to either sex or money — two common themes in rapid downfalls — but fell into a more general category, with multiple incidents of “misjudgment.” There are not believed to be any other affiliated investigations ongoing.
While the specifics of the violations are not publicly known, the method of his departure — a resignation that eases him out and not an outright termination — appears to speak to their severity.
Regardless, fashion’s C-suite should certainly be on notice, that being a big-time executive don’t get a free pass. (Smith’s total compensation for fiscal 2020 tallied $8.1 million, including a salary of $1.1 million, incentive pay of $1.5 million and stock awards valued at the time at $4 million.)
Smith is the second high-profile fashion industry executive to lose their job this month after violating company policies. The Estée Lauder Cos. executive vice president John Demsey was recently ousted after posting a racist meme on Instagram.
Smith was one of Lauren’s top executives, overseeing buying, planning and merchandise allocation globally and leading the Lauren brand.
His LinkedIn profile details a career with a sharp upward trajectory at the company, starting out as a vice president of logistics and operations in Europe with stints as senior vice president of global supply chain, head of the company’s business in Japan and group president of international.
Smith was said to be generally seen as a well-seasoned, capable global executive who was well thought of.
Since he was not in charge of day-to-day operations of the businesses he oversaw, the departure is not seen as having an immediate disruption to the company.
“We are saddened by this situation and recognize that this news will come as a surprise,” executive chairman and chief creative officer Ralph Lauren and president and chief executive officer Patrice Louvet told employees in an internal memo obtained by WWD.
“However, upon recently learning about allegations related to Howard’s personal conduct, our board of directors launched an independent investigation, which is its responsibility whenever such allegations are raised,” the pair said. “Because the investigation revealed conduct that violated our code of conduct and other policies, it was decided that Howard would resign. You should know that these issues do not concern the company’s financials or performance.
“We have great confidence in our strong bench of leaders in every region who already oversee the day-to-day business,” Lauren and Louvet said. “Together, we will continue to build on our momentum and realize the many opportunities ahead for our iconic brand. A number of these leaders will report to Patrice on an interim basis — they have been made aware, and you can expect a more detailed plan on this interim organizational structure shortly.”
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