Glass Lewis' recommendation for Boohoo shareholders comes ahead of the General Meeting scheduled for 21 January 2025.
Frasers Group, which owns a 26% stake in Boohoo has been vocal in its criticism of Boohoo's management. The group has accused Boohoo of "long-term mismanagement" and has been actively seeking to install its founder Mike Ashley and restructuring specialist Mike Lennon on the board to steer the company in a new direction.
However, Glass Lewis has acknowledged the substantial measures undertaken by Boohoo in recent months, including a comprehensive business review, fortification of its financial position, and strategic leadership transitions.
In November last year, Boohoo appointed Dan Finley as CEO and promoted Tim Morris to independent chair. Mahmud Kamani also shifted roles from executive chair to executive vice chair.
According to Glass Lewis, these changes "should enable the company to retain Kamani's institutional knowledge and expertise while empowering new leadership to undertake initiatives that will likely be needed to improve the company's performance".
This perspective of the proxy also aligns with both the independent committee of Boohoo and another proxy adviser, Institutional Shareholder Services (ISS), who have unanimously advised against Kamani's removal.
Last month, Glass Lewis expressed concerns regarding the potential appointment of board members with strong connections to Frasers.
Glass Lewis also noted that Frasers’ refusal to offer the required governance commitments "raises questions about [their] commitment to addressing the governance and conflict-of-interest concerns highlighted by the company and may suggest that their intentions are not fully aligned with the interests of the company's broader shareholder base".
Frasers Group had not responded to Just Style's request for comment at the time of going to press.
A previous attempt by Frasers to secure board seats was thwarted during a shareholder vote on 20 December 2024, where only 36% were in favour of appointing Ashley and Lennon as directors.
Earlier this year, Frasers Group signalled a potential shift in strategy after acknowledging the stance of independent shareholders and hinting at reevaluating its pursuit for board representation at Boohoo.
Recently, Boohoo accused Frasers Group of trying to "destabilise" its plans in a letter to shareholders. Boohoo also urged its shareholders to oppose the resolution aimed at removing co-founder Kamani from the board last week.
Boohoo had previously offered Frasers a seat on the board but excluded Mike Ashley from consideration.
This offer came amid an intensifying dispute that began with Frasers' initial proposal to appoint Ashley as CEO — a proposition that was effectively halted.
