Five members of Bed Bath & Beyond‘s board of directors will step down effective May 1 as part of a transformation of the Union-based company’s board to comprise a diverse set of 10 directors, nine of whom are independent and six are women.
The 10-member board will form a committee to review all aspects of the company’s business strategy, structure, and transformation.
Current Lead Independent Director Patrick Gaston has been named independent chairman, effective immediately.
“The board has been undertaking a comprehensive review of its composition, governance structure and compensation practices,” said Gaston in a statement. “The changes announced today reflect significant shareholder input and underscore our commitment to ensuring we have best-in-class governance.”
“This board transformation and refreshed governance structure is rooted in accountability, transparency and collaboration, and as we provide oversight and move the company forward, we are committed to continuing to act in the best interest of our shareholders,” he said.
The new board members will include Harriet Edelman, current vice chairman of Emigrant Bank and former Avon Products Inc. executive; Harsha Ramalingam, current senior advisor at Boston Consulting Group, current president and owner, Ramalingam Consulting, and former executive at Amazon.com Inc.; Andrea Weiss, current founding partner of The O Alliance Consulting Services and chief executive officer of Retail Consulting Inc., and former executive at dELiA*s Inc., The Limited Inc., GUESS Inc., Ann Taylor Stores Inc. and The Walt Disney Co.; Mary Winston, president and founder of WinsCo Enterprises Consulting Services and former executive at Family Dollar Stores Inc.; Ann Yerger, corporate governance specialist at Spencer Stuart North American Board Practice and former executive director of the Council of Institutional Investors.
Four current board members will remain, namely Stephanie Bell-Rose, Patrick Gaston, Johnathan Osborne and Virginia Ruesterholz.
The average tenure of the new board, which will reflect significant racial and ethnic diversity, will be less than four years.
Current board members Dean Adler, Stanley Barshay, Klaus Eppler, Jordan Heller and Victoria Morrison will step down. Co-Founders Warren Eisenberg and Leonard Feinstein have transitioned to the role of co-founders and co-chairmen emeriti and will retire from the board.
Last month, four activist investors urged the company to replace its entire board and oust CEO Steven Temares. Bed Bath & Beyond said that activist investors Legion Partners Asset Management LLC, Macellum Advisors GP LLC and Ancora Advisors LLC were invited to partake in the refreshment of its board, but declined.
The activist investors responded to the changes Monday, saying that more meaningful change is “urgently needed.”
“The board changes announced today by Bed Bath are not nearly enough when measured against what is needed to address the issues with the current board and management, including that CEO Steven Temares must be held accountable for the company’s prolonged poor performance and destruction of shareholder value,” activist investors said in a joint statement. “Further, the Company’s announcement lacks any detailed strategic vision for driving value creation at Bed Bath.”
They plan to move forward with their campaign to install new leadership at the company, the statement said.