Ted Baker commits to cultural change after resignation of founder

Ted Baker
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Fashion retailer Ted Baker has said it is determined to learn lessons and ensure that its staff feel respected and valued, in the wake of the resignation of founder Ray Kelvin as he faces allegations of sexual harassment.

In December it emerged that employees at the FTSE 250 firm had claimed that Kelvin liked to hug all colleagues and behaved inappropriately towards women at the company.

Today it was announced that Kelvin had agreed to resign from the firm. He is still its major shareholder, with a 35% holding in it.

David Bernstein, acting as executive chairman, said: “As a board of directors, we are committed to ensuring that all employees feel respected and valued. We are determined to learn lessons from what has happened and from what our employees have told us and to ensure that, while the many positive and unique aspects of Ted’s culture are maintained, appropriate changes are made.”

Ted Baker employees had said that HR had not acted on their complaints. They petitioned campaign website Organise, with over 100 allegations of harassment being recorded. This led to the formation of an independent committee at Ted Baker to investigate the claims alongside law firm Herbert Smith Freehills (HSF), which was briefed to examine the allegations and the retailer’s culture.

This probe is continuing but expected to finish within a few weeks, during which time its primary focus will, said the retailer, be on the company’s “policies, procedures and handling of complaints”.

Signatories to the Organise petition, including current and past employees, made numerous claims on the site, including that “the CEO always wants a hug from every member of staff” and that he had kissed the back of certain employees’ ears.

One said: “I’ve seen the CEO ask young female members of staff to sit on his knee, cuddle him, or let him massage their ears.” Another claimed there were invitations to star in porn movies with Kelvin “in the middle of the office in front of everyone”.

Kelvin said in a statement: “Difficult though this decision is given that Ted Baker has been my life and soul for over 30 years, I’ve decided that the right thing to do is to step away from Ted and allow the business to focus on being the outstanding brand it is.”

His decision to go was announced on the same day the government launched proposals aimed at giving whistleblowers greater protections.

It is crucial to create an open-door policy whereby employees are encouraged to report wrongdoing and feel safe and supported in doing so” – Emma Gross, SA Law

Pam Loch, partner, founder and managing director of Loch Associates Group, sounded a cautious note when it came to allegations: “We have definitely seen an increase in the number of complaints involving sexual harassment. With the current media spotlight on this highly emotive subject, some employers can overreact to complaints and forget that they owe a duty of care to all the employees involved leaving them exposed if they fail to follow their processes or take steps that demonstrate a bias towards the employee making the allegations.”

Emma Gross, a solicitor at SA Law, said it was clear that Kelvin’s departure was in the firm’s best interests given that share prices had risen since he stepped down. She said: “It is crucial to create an open-door policy whereby employees are encouraged to report wrongdoing and feel safe and supported in doing so.

“In the wake of recent scandals, the rules around non-disclosure agreements and confidentiality clauses are set to be tightened under new legal proposals. Individuals, such as employees, cannot be prevented and intimidated from whistleblowing and reporting crimes such as harassment.”

For Mike Tremeer, partner at Fladgate, the lesson for all companies of the resignation is the importance of acting quickly when inappropriate behaviour is witnessed. He said: “[The large number of complaints] indicates that issues were not addressed proactively previously. Surely someone with managerial responsibility will have observed questionable behaviour if it was as rife as the reports indicate? They should have intervened if so.”

Ted Baker has 490 stores and concessions worldwide: 192 in the UK, 98 in Europe, 111 in the US and Canada, 80 in the Middle East, Africa and Asia and nine in Australia.

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