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Ted Baker under pressure to publish findings of inquiry into founder


Ted Baker faces pressure from shareholders to publish the findings of an investigation into alleged inappropriate behaviour by founder Ray Kelvin, after it said the inquiry had found “several areas for improvement” at the retailer.

The company said on Thursday that an independent inquiry by the law firm Herbert Smith Freehills into allegations against Kelvin, including “forced hugs”, had concluded but it declined to release the contents.

Ted Baker said it would launch training programmes for staff on “acceptable workplace conduct” and HR policies, as it sought to draw a line under the furore by appointing a company insider, Lindsay Page, as chief executive to replace Kelvin, who stepped down in March.

One top 10 investor, speaking to the Guardian, said that keeping the investigation private meant questions remained unanswered about the oversight exercised by the board and the company’s human resources department before the allegations were first published.

It is understood that other top 10 shareholders have raised concerns that the lack of transparency means that Ted Baker’s owners are not able to judge the company’s exposure to future legal and reputational risks. “A number of shareholders are dissatisfied with the situation,” the shareholder said. “It’s one thing to suspend the founder. The other thing is, is there any legal risk for the group?”

Kelvin, who founded Ted Baker in Glasgow in 1987, resigned amid allegations of inappropriate behaviour towards staff that included kissing ears and giving unwanted hugs and shoulder massages.

Kelvin, 63, denies all the allegations. Last month he said he would resign to “allow the business to focus on being the outstanding brand it is so it can face 2019 with fresh energy and renewed spirit”.

Ted Baker said that in light of Kelvin’s resignation, the law firm’s report had focused its conclusions and recommendations on Ted Baker’s policies, procedures and handling of HR-related complaints. The company added that it would not comment on specific allegations made against Kelvin.

Confirming that the investigation had interviewed “a significant number of people”, the company said the report had “identified several areas for improvement in the company’s HR policies and procedures”.

Kelvin remains the largest single shareholder in the business, with 35% of the company’s stock. Ted Baker shares fell by 1.9% on Thursday, leaving them about 20% below their value before the allegations were first published.

Refusal to publish the report also raises questions over whether the board’s chairman, David Bernstein, and the new CEO were the right choices to continue to manage the company, the shareholder who spoke to the Guardian said.

Page had stepped in as acting chief executive in December, when Kelvin first took a leave of absence after the allegations. Page, 59, joined Ted Baker as finance director in February 1997 before taking on the additional role of chief operating officer in July 2014; Bernstein has served as a director since 2003.

However, some City figures gave their backing to Ted Baker’s leadership.

Wayne Brown, an investment analyst at Liberum, a stockbroker which counts Ted Baker among its clients, wrote that the conclusion of the inquiry and the appointment of Page “should now draw a line in the sand in what has been an unfortunate process”.

Page “represents the right man to lead the business”, Brown wrote in a note to clients.

The investigation into the allegations against Kelvin as well as the process followed by Ted Baker’s processes in handling complaints began in December. Herbert Smith Freehills interviewed current and former Ted Baker staff as well as outsiders.

As a result, Ted Baker will update its training on workplace conduct and maintain a whistleblowers’ hotline, the company said on Thursday. It will survey staff this year to gauge progress.

Sharon Baylay, a former BBC Worldwide and Microsoft executive who has served on the board since July, will continue to act as a designated non-executive director for engagement with the Ted Baker workforce.

The allegations against Kelvin first emerged in a petition on the employee campaigning platform Organise. Some 300 Ted Baker staff signed the petition, with 100 signatories claiming that they had witnessed inappropriate behaviour in the organisation, according to Nat Whalley, the chief executive and founder of Organise. Ted Baker employs 3,800 staff.

Whalley said petition signatories who had responded to a survey on Thursday had mostly welcomed the company’s actions to improve its processes.

“We feel like we’ve sent a message to companies,” Whalley said. “This is a huge watershed moment, and it shows companies that you need to investigate thoroughly any reports of harassment.”

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