Boohoo co-founder Carol Kane sees off attempt to remove her from the board
The co-founder of Boohoo has survived an attempt by shareholders to remove her from the fast-growing fashion retailer’s board.
The attempt to oust Carol Kane, which had the backing of high-profile groups, followed accusations of poor working conditions at suppliers in Leicester who make the fast fashion group's clothes. It in the event, it was easily seen off.
At the company's AGM today some 12% of the votes cast by shareholders were in favour of removing Kane from her position as an executive director, for which she was paid nearly £1.4 million last year.
The vote to re-elect Kane, who co-founded Manchester-based Boohoo with Mahmud Kamani in 2006, was expected to go in her favour, but with influential shareholder advisory group Glass Lewis backing a the removal, it was not fully certain.
More than 20% of shareholder votes were cast against the company’s remuneration report, which handed £5.5 million to Boohoo’s four executive directors.
Boohoo said: “The Board is delighted that shareholders have recognised the important and very specific role Carol has on the board with a very strong vote in her favour.
“The Remuneration Committee acknowledges that the 79.80% vote in favour of the Remuneration Report represents a significant improvement versus last year. The Remuneration Committee looks forward to ongoing engagement with the Group’s shareholders as it continues to shape the Group’s future remuneration policy.”
The AGM was Boohoo's first since a raft of bad publicity over conditions at suppliers to the business. According to reports published last summer, some workers in Leicester were being paid less than minimum wage, and working in poor conditions, while making clothes that ended up in Boohoo’s warehouses.
Upon publication of the reports, the company immediately commissioned an independent review by Alison Levitt QC, which found that 35 out of 49 suppliers failed a minimum wage probe.
It also found poor conditions “across the best part, if not the entirety” 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 has said it is well on its way to clamp down on bad practices in its supply chain. The company has deselected hundreds of suppliers, appointed retired judge Sir Brian Leveson to hold it to account on its "Agenda for Change, and made executive bonuses contingent upon achieving certain Environmental, Social and Governance goals.
Earlier this week it revealed that is had signed up to Fast Forward, a sector-leading supply chain auditor that already has members including ASOS and M&S.
“Despite Boohoo’s self-styled Agenda for Change, the company’s high speed, low cost business model continues to drive labour rights violations in its supply chain,” said Martin Buttle, at pressure group ShareAction.
“This is a major concern not only for workers and society, but also for investors who recognise the financial impact of poor labour relations and reputational damage.”
Buttle said that investors should engage with Boohoo to improve labour standards for the people who make its clothes.
Commenting on the outcome of the AGM, Boohoo CEO John Lyttle said: “We are delighted with the overwhelming support received from shareholders in passing all resolutions at our AGM, including the re-election of co-founder Carol Kane. Carol plays an integral role in establishing the identities that sit behind each of the brands on our multi-brand platform, and as a co-founder of the Group her drive, enthusiasm and unwavering support for our Agenda for Change will be crucial in delivering change for the benefit of all stakeholders.”
The Boohoo Group has been one of fashion retail's best performers during the pandemic and has taken advantage of its strong financial position to snap up failed brands and bolster its portfolio.
At the start of the pandemic it acquired Warehouse and Oasis from liquidators, followed by the brand and website of Debenhams.com and several Arcadia brands including Dorothy Perkins, Wallis and Burton.
All have since been relaunched as digital-only businesses though it was revealed this week that Boohoo was in talks to open one small physical Debenhams store outside of London to satisfy beauty brands' supply conditions, which often require retailers to have a bricks & mortar presence.