Chipotle Mexican Grill Inc. is interviewing potential additions to its board of directors in response to efforts earlier this year by activist investors to shake up the chain’s leadership, the company said Tuesday.
Chris Arnold, Chipotle’s communications director, said in a statement the company is interviewing for a new board member and is considering additional board changes “to meet longer-term needs.”
Arnold added that the company is in the process of adopting proxy access provisions, based on results of last year’s shareholder voting, which would make it easier for shareholders to nominate directors and seek change.
Earlier this year, investor groups expressed dissatisfaction with Chipotle’s board make up as the chain struggled to recover from a series of foodborne illness outbreaks at the end of 2015.
In a letter to shareholders in April, CtW Investment Group argued the Denver-based chain had long outgrown its governance arrangements.
CtW criticized the board’s insularity, saying members have had excessively long tenures and were all white and overwhelmingly male.
Proxy advisory firm Institutional Shareholder Services also pointed to a flawed board succession process that hasn’t allowed directors’ skillsets to keep pace with the chain’s size and complexity.
Still, in May the chain’s shareholders voted to retain the existing board.
Arnold, however, said Tuesday the company is taking action based on shareholder feedback, “as we generally do,” he said.
The potential new board member would join the nine existing members. Arnold did not offer details on what other changes to the board may be under consideration.
Contact Lisa Jennings at [email protected]
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