When Boohoo Added Non-Financial Targets To Performance Bonuses

Retail
Written By Rick Watson

Can and should governments tie corporate bonuses to responsibility? Boohoo and the UK government have answered this "yes", and I dug up the details.

What happened? I have more questions than answers, but here is a start: Boohoo's CEO has agreed with an independent UK review commission that he thinks so and has added a "non-financial" performance condition to executive their substantial executive bonuses. To be fair, this took a year of media scrutiny and (voluntary) appearance by their Chairman of Boohoo before the commission.

But what are the conditions? Essentially they are related to environmental, social, and sustainability governance (ESG):

  • Worker rights in Leicester (UK) factories.

  • Signing up and supporting the Textiles 2030 Sustainable Clothing Action Plan [think voluntary "climate accord" for textiles - requires 40-50% carbon emission cuts across the industry).

  • Ensuring suppliers pay fair wages and don't cut corners on safety and treatment of workers.

What is the language of the bonus tie-in? Is this enforceable? Or is this just lip service?

Should other companies sign up proactively? What will be the long-term impact on retail? How would you feel about these ideas coming to the US legally?

Rick Watson

Rick Watson founded RMW Commerce Consulting after spending 20+ years as a technology entrepreneur and operator exclusively in the eCommerce industry with companies like ChannelAdvisor, BarnesandNoble.com, Merchantry, and Pitney Bowes.

Watson’s work today is centered on supporting investors and management teams incubating and growing direct-to-consumer businesses. Most recently, in partnership with WHP Global, Rick was a critical resource in architecting the WHP+ platform, a new turnkey direct to consumer digital e-commerce platform that powers AnneKlein.com and JosephAbboud.com.

Watson also hosts a weekly podcast, Watson Weekly, where he shares an unbiased, unfiltered expert take on the retail sector’s biggest players.

In the past year alone, Rick has spoken at many in-person and virtual events as well as podcasts on topics ranging from retail/ecom to supply chain/logistics and even digital grocery including CommerceNext IRL, ASCM Connect, and Retail Innovation Conference.

https://www.rmwcommerce.com/
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