The state treasurer of Connecticut called Urban Outfitters' proposal to add CEO Richard Hayne's wife Margaret Hayne to its all-male board "cynical," an "insult" and "bogus," according to a statement by the New York and Connecticut state pension funds, the Catholic Sisters of Mercy's investment arm, and the Calvert and Portico investment funds, who are pressing the company to add women to its board.
“While Margaret Hayne certainly has the qualifications and experience to represent women’s interests, she unfortunately does not satisfy other important governance criteria, namely director independence," said Calvert president Barbara Krumslek in a statement. A company that mostly sells to women should have more women making decisions, as rivals like Gap and Nordstroms already do, she added.
Margaret Hayne, who is the second-largest individual shareholder of Urban Outfitters after her husband, was paid $451,000 last year as president of its Free People stores, the company said in its yearly statement to shareholders. Urban Outfitters said she, like other company-backed director nominees, has shown "personal and professional integrity, good judgment, a high level of ability and business acumen," but also acknowledged that as the CEO's wife she is not "independent." Read Urban Outfitters'14-A shareholder statement here.
"The planned appointment of the wife of the retailer’s CEO to the board should not cause any serious-minded investor to waver in support of the move to identify women and minorities for the company’s board of directors who are both qualified and independent," the investors' group said in its statement about Urban Outfitters, which runs the Anthropologie stores along with Free People and other brands.
The South Philly-based women's clothing chain operator faces a shareholder resolution urging the company to diversify the gender and ethnic makeup of its board of directors. Previous versions, opposed by management, have failed to win majority shareholder support. Almost two-fifths of shareholders voted Yes last year, up from one-fifth in 2011.
“It is time for Urban Outfitters to stop equivocating and embrace the merits of having a bona fide diverse board of directors," added Connecticut State Treasurer Denise L. Nappier, in the investors' statement. "The manner in which the company board is currently handling this issue is a calculated insult, and reinforces the need to change its culture." She said a 'truly diverse and independent board" will boost shareholder value: "As principal fiduciary of the $26 billion Connecticut Retirement Plans and Trust Funds with investments in this company, that is what I care about and not bogus representation of diversity."