Urban Outfitters has expanded its board after a pension fund investor took issue with its lack of diversity and outsider voices.
Sukhinder Singh Cassidy is now the retailer’s 10th board member, joining nine other long-serving members. She is the founder and current chairman of Boardlist, an online marketplace aimed at getting women in more boardrooms of the tech industry.
Cassidy until recently oversaw Joyus, a premium online video network that she founded in 2011, and served a brief stint as chief executive officer of Polyvore after executive positions with Google and Amazon.
Wall Street seemed in favor of the addition and sent shares of Urban up 8.1 percent to $21.62, a three-month high.
While two members of Urban’s board are women, one, Margaret Hayne, is the wife of founder and ceo Richard Hayne. She’s also the chief creative officer of Urban and ceo of Urban’s Free People brand.
The other female board member is Elizabeth Ann Lambert, the founder and principal of Bunkhouse Management Group LLC, a hospitality management company.
An Urban representative could not be reached for comment on Cassidy’s appointment.
Several of the remaining members have close ties to the Haynes, which CtW Investment Group, a Washington, D.C.-based investor that works exclusively with union-sponsored pension funds, took issue with in May.
Richard Hayne’s nephew Azeez Hayne serves on the board and is Urban’s general counsel and corporate secretary, as does his son, David Hayne, who is also chief digital officer.
But the two members CtW wanted off the board entirely are Robert Strouse and Harry Cherken Jr., two of the retailer’s longest-serving directors.
Strouse, president of private equity firm Wind River Holdings LP, has served as a lead director of Urban since 2002, while Cherken, a partner with Drinker Biddle & Reath LLP, has been a director since 1989. The company went public in 1993.
Of Cassidy’s appointment, a CtW spokeswoman said it’s “a first step” to improving Urban’s board, but concerns remain.
“Urban’s decision to merely expand the board also doesn’t address our concerns over highly tenured directors or directors that have received low outside shareholder support that currently remain on the board,” the spokeswoman said. “While we’re cautiously optimistic that adding this new nominee is the beginning of moving towards a public company that is truly accountable to outside shareholders, we plan to continue monitoring Urban and its performance in the coming months.”
Shortly after CtW issued its letter blaming the Urban board’s “insular composition and lack of independence” for the company’s “stagnant revenue growth and a slumping stock price,” Hayne said he’d been evaluating the board for some time and new members were being considered.
Hayne also said that this year could see up to two new board members.
Urban’s second-quarter performance showed a continued decline in profits and sales, fault for which Hayne admitted rest squarely with the company and its decisions in product and merchandising.
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