WASHINGTON, April 13 (UPI) — The fallout from the food crisis that rocked Chipotle could see heads roll at the board level.
A leading investment group is calling for directors Patrick Flynn and Darlene Friedman to be replaced when they stand for re-election at the company’s annual meeting next month.
In a scathing letter sent to shareholders Wednesday, CtW Investment Group stated that the all-white, mostly male board at Chipotle Mexican Grill Inc. lacked diversity and wasn’t equipped to rebuild trust after several foodborne illness outbreaks.
“Shareholders must intervene now,” urged Dieter Waizenegger, executive director of CtW, which is affiliated with the union-backed group Change to Win.
“With the company facing slowing momentum and potential growth challenges going forward, Chipotle is in need of a genuinely independent oversight now more than ever.”
Waizenegger called for Chipotle to establish a food-safety and sustainability board committee and to provide better proxy access to smaller stakeholders.
He stated that the burrito company’s board has “a startling lack of racial and gender diversity.”
And he insisted that long-standing board members Flynn and Friedman “must be held accountable for failing to sufficiently refresh the board.”
He added: “We strongly believe that demographic diversity in the boardroom leads to healthier debates, better decisions and greater adaptability to change.”
Chipotle, which has 1,900 restaurants in the United States, is still struggling to recover from a series of E.coli and norovirus outbreaks that occurred last year.
The company’s stock has fallen dramatically in the past year, and sales dropped by 26 percent in February.
Chipotle is scheduled to hold its annual meeting on May 11 in Denver, where its headquarters are based.