French Connection under fire over corporate governance

French Connection shareholders are being urged to vote down the company's financial statements. According to press reports today, Research, Recommendations and Electronic Voting (RREV), a joint venture watchdog on corporate governance between the National Association of Pension Funds and proxy voting services body Institutional Shareholder Services, has alerted the retailer's investors to a number of breaches in corporate governance.

Chief among RREV's concerns is that majority shareholder, chairman and chief executive Stephen Marks, has only one independent non-executive director to challenge him. French Connection has no audit, remuneration or nominations committees. In light of this, RREV is understood to have sent a circular to pension fund managers, urging them to register their protests by voting down the retailer's financial statements at its annual general meeting in two weeks.

French Connection experienced a drop in profits of 15 per cent in its full-year report last month, forcing Marks to admit that the retailer had lost its fashion edge. The statement came after a profits warning in November.