CtW Investment Group called for a "complete and immediate overhaul" of the Board of Directors of footwear maker Skechers USA Inc, Reuters reported. According to the shareholder, the all-male board is insular and needs a revamp to avoid possible missteps.
This is an early barrage in this year's proxy season from the union pension funds adviser that has also led investor revolts in much larger firms like JPMorgan Chase & Co and Hewlett-Packard Co which caused directors to depart from the companies, the report said.
CtW wrote a letter to the Skechers board which said that the members had lengthy tenures and lacked gender diversity. The letter also put in question the independence of some directors due to what could be conflicts of interest. The letter called for changes before the yearly meeting of the company scheduled in the spring.
CtW said, "The CtW Investment Group urges a complete and immediate overhaul of Skechers U.S.A., Inc's board of directors in light of several serious governance risks." According to the group, Skechers could avoid certain problems through improved oversight. It cited the incident in 2012 when the footwear maker had to pay $40 million to settle the Federal Trade Commission charges that the company made baseless claims that its "Shape-up" shoe line would help those who wear it lose weight and tone muscles, the report said.
Basing on its count, CtW said that six of the directors have been on the board for at least 12 years. The investor also said that only five of the directors are independent, Reuters reported.
CtW Executive Director Dieter Waizenegger told Reuters that if Skechers fails to act, CtW could launch a campaign against some or all of members of the board. He added that lengthy tenures need to be reviewed to prevent directors from slacking as they become more accustomed to their roles. He said, "The longer you are on the board, the less obvious it is you can be independent."
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