Shareholders have secured the rare replacement of an entire board – and the installation of a majority-female set of directors – following a proxy tussle at Destination Maternity.
The company late last month said that all four director nominees of investors Nathan Miller and Peter O’Malley had been elected to the board at Destination Maternity’s AGM. The company bills itself as the world’s largest designer and retailer of maternity apparel. The new board comprises Holly Alden, Christopher Morgan, Marla Ryan and Anne-Charlotte Windal.
The vote followed disagreements between Miller and O’Malley and the former board over the strategic direction and performance of the company. The investors have a turnaround plan they intend the new board to implement. The previous board – which comprised three men and one woman – insisted it had always acted in the best interests of company shareholders and criticized what it said were the investors’ ‘inexperienced and under-qualified candidates’ for directors.
Miller and O’Malley disputed this characterization and argued that the company needed to have a majority-female board. Despite the unusual demand, O’Malley, managing partner with Kenosis Capital, insists he and Miller are not activists but long-term investors. ‘We thought a maternity company should be run by women, who would be simpatico with customers,’ he tells Corporate Secretary.
In response to the accusation that the slate of directors is inexperienced, he adds: ‘They each know what they are doing [and have been very successful] even if they haven’t sat on a board before.’ During an interview with CNBC, O’Malley said: ‘If the company’s argument is this chauvinistic trope that women can’t join the board because they’ve never been directors before, then this embarrassing situation in corporate America will never be remedied.’
He tells Corporate Secretary: ‘The message to boards is: be open [to investor inquiries and comments] and challenge you.’
The new board subsequently appointed Ryan as CEO. She replaced Melissa Payner-Gregor, who had served as interim CEO since January 2018 and director since August 2009. Payner-Gregor left the company to pursue other opportunities, Destination said in a statement.
According to the company, Ryan has more than 25 years of experience in branded apparel and retail, as well as extensive experience consulting to Fortune 500 companies. For example, she worked at Lands’ End, most recently serving as senior vice president of retail, and held various senior positions at J.Crew. She also has experience in merchandising and management roles at Brooks Brothers, American Eagle Outfitters, Abercrombie & Fitch and The Gap.
Payner-Gregor said in a statement after the AGM vote: ‘We thank all of our stockholders for their participation and input throughout this process. The company is incredibly grateful for the outgoing directors’ service on the board, and thanks them for their contributions to Destination during the course of their board tenure. We look forward to working collaboratively with our new directors to maximize value for all stockholders.’
In a statement at the same time, Miller said: ‘Destination Maternity has excellent potential, and fresh perspectives in the boardroom coupled with the turnaround plan we have put forth should help that potential be realized. I also want to thank the company’s outgoing board members… for their important service as directors.’
Ryan did not respond to a request for comment and the former board members could not be reached.
Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
