Urban Outfitters

Eureka! Urban Outfitters becomes a W Company!

Urban Outfitters (NASDAQ:URBN) heeded the call of shareholder activists and named Elizabeth Ann Lambert to its board of directors on December 22. Lambert, principal and manager of Bunkhouse Group, LLC, became the second woman director on Urban’s board, after the appointment of Margaret Hayne, president of Free People, Urban's chief creative officer and wife of CEO Richard Hayne in 2013. Women now hold 25% of Urban Outfitters' board seats. Investors are hailing the news.
At the Urban Outfitters' annual meeting on May 27, Mr. Hayne thumbed his nose at a shareholder resolution that called on the company to add female and minority directors. The proposal was sponsored by Thomas DiNapoli, Comptroller for the State of New York on behalf of the New York State Common Retirement Fund and Denise Nappier, CT State Treasurer, on behalf of the Connecticut Retirement Plans and Trust Funds.
In 2013 Mr. Hayne urged shareholders to reject diversity proposals on the grounds that imposing gender and minority requirements would "undermine the company's holistic evaluation of candidates," reported Gretchen Morgenson in her article "Shareholders Are Speaking Up, But Who's Listening?
Well, it appears that Mr. Hayne was listening, and we hope that other T and Z companies (those with one or no women) will follow Urban Outfitters lead.

Urban Revolt

For a company whose target market is mostly women, Urban Outfitters is failing miserably on behalf of its board’s gender diversity. Investors are not pleased. Almost half of the company's independent shareholders voted in favor of a resolution to commit to a policy of inclusion that would consider women and minority candidates for the board. The resolution was rejected.
Over the past three years, shareholders have repeatedly voiced concern regarding Urban’s all male board, submitting proposals that would address the issue. With each proposal getting shot down, shareholders are digging in, refusing to accept such blatant disregard for gender diversity in the corporate world. In response to their disgruntled investors, Urban appointed one woman to the board last year: the founder and chief executive’s wife. As Gretchen Morgensen said in a New York Times article last year, "Talk about poking your shareholders in the eye with a stick."
Trying to understand Urban’s response is perhaps even more difficult when you compare Urban to a company in the same market: Abercrombie & Fitch. A&F jumped the proverbial gun and nominated four women executives, highly qualified in retail, to their board in anticipation of their annual meeting this month.
We applaud the Urban investors and their protest vote, and hope more companies like Abercrombie & Fitch recognize the value that women bring to the boardroom table. 

Those In The Know

Speak Out, Margaret!
Those in the know, namely some pretty big institutional investors, have called the addition of Margaret Hayne to Urban Outfitter’s board “cynical” “bogus” and a “calculated insult" to investors who have supported shareholder resolutions against Urban's all male board.
Ms. Hayne, the wife of Urban's CEO Richard Hayne, is president of the company's Free People brand and is Urban Outfitter's second largest shareholder, outside of her husband. A smart businesswoman she's qualified to serve on lots of boards, but not on this one, shareholder activists say.
And while there's reason to believe that Mr. Hayne put his wife on the board to silence his critics, maybe he's provided us with an opportunity.
When Mark Zuckerberg put Sheryl Sandberg on Facebook's board he got a lot of flack because Sheryl was an insider. But soon after Sandberg's appointment, Facebook added a second woman, Susan Desmond-Hellmann, a Chancellor of the University of California and former president at Genintech.  In our lingo, Facebook became a "W" Company.
So, we're reaching out to Margaret Hayne and asking her to speak out; to tell her husband and his cronies that her appointment marks a change; the buck doesn't stop here. The board needs another woman, and maybe a person of color to be more representative of Urban's stakeholders. Ms. Hayne has an opportunity to mend some fences. We hope she's up to the task.

Syndicate content