boohoo appoints Trainline plc CFO as independent director to improve governance issues

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boohoo Group PLC (LON:BOO) has appointed Shaun McCabe as its new independent non-executive director to improve its governance issues.

He will also chair the audit committee and sit on the remuneration and nomination committee.

READ: Boohoo upgraded to ‘neutral’ by Credit Suisse as news should be more balanced after governance scandal

McCabe is currently chief financial officer at ticketing platform Trainline plc (LON:TRN) and non-executive director at online retailer AO World PLC (LON:AO.), while he previously held senior roles at ASOS PLC (LON:ASC) and Amazon Europe.

The move is part of boohoo’s commitment to improve its governance issues, arisen after a scandal on poor working conditions at a supplier’s factory in Leicester uncovered in the summer.

The online giant has taken the first step to rebuild trust with its stakeholders and should appoint another non-executive director as promised in September, when it outlined a plan in response to an independent review by Alison Levitt QC.

Among other new measures, supply chain compliance will become mandatory at board meetings, the AIM-listed firm will consolidate the list of suppliers and establish a trust to support workers in the Midlands.

The fast-fashion retailer still has founders Mahmud Kamani and Carol Kane on the board, in their respective roles of executive chairman and executive director, which Shore Capital said could be “a potential barrier to the much needed change”.

Nonetheless, the appointment is “a step in the right direction” to be welcomed by investors, according to analysts.

“We hope that this with the additional NED with ESG experience, together with the industry veteran who will lead the change programme will allow independent and fresh perspective into the company,” they commented.

“We continue to wonder whether there has been any brand damage to the group and have highlighted before that it will be interesting to understand the social media influencer’s perspective on events over the last six months.”

“It is our belief that central overheads will continue to rise as the company employs more central resource to sort out the supply chain issues.”

Also on Tuesday, Morgan Stanley trimmed its stake in the group to 5.36% from 5.48%.

Shares rose 1% to 287.5p at noon.

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