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(Reuters) - Union pension fund adviser CtW Investment Group on Monday urged Urban Outfitters Incs <URBN.O> investors to vote against two long-standing directors and said the boards extreme insularity contributed to the companys weak performance. The apparel retailer has reported declining profits in the last three years, as shoppers shift to buying online and from fast-fashion brands such as H&M <HMb.ST> and Inditexs <ITX.MC> Zara. CtW recommended voting against the companys two longest-serving members of its nominating and governance committee, Robert Strouse and Harry Cherken Jr, who are up for re-election on May 23. The current makeup bears the hallmarks of a highly insular and long-tenured board, one that reflects the committees failure to maintain a robust and credible recruitment process, CtWs Executive Director Dieter Waizenegger wrote in a letter to investors. For a company that is so reliant on global sourcing and focused on women, it is surprising that the board consists of largely Caucasian males with law and finance backgrounds, the CtW letter said. The retailers board has two women, including Chief Executive Richard Haynes wife, Margaret Hayne. Urban Outfitters shares were down 1 percent at $22.67 on Monday in afternoon trading. Up to Fridays close, the stock had lost nearly 20 percent of its value since the start of the year. Urban Outfitters denied CtWs assertion that the board composition had resulted in the companys stock price decline. Changing the composition of a board is not something that can or should take place overnight, the company said in an email statement. It added that its efforts to diversify the board included retaining an independent search firm to assist the nominating committee in identifying candidates with relevant expertise. CtW also accused Urban Outfitters of being run as a family business, citing the appointment of CEO Haynes son, David Hayne, as the companys first chief digital officer last year. The company in 2015 acquired the Vetri Family Italian pizza chain, which was founded by Marc Vetri, whom Hayne had personally known for several years, CtW said. CtW works with union pension funds with more than $200 billion in assets collectively to enhance long-term shareholder returns through active ownership. (Reporting by Sruthi Ramakrishnan in Bengaluru; Editing by Martina DCouto) View comments
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