It's been nearly a week since Real Money began asking questions about lululemon athletica's (LULU) mystery director, Rhoda Pitcher -- and we are still no closer to having any answers.
Real Money could not verify Pitcher's consulting businesses and our team has yet to verify the credibility of University Associates Inc., which is where Pitcher claims to have received a master's degree in Organization Development, according to her corporate biography.
The co-chairman of the board, David Mussafer, did issue a statement about Pitcher late Tuesday, but it failed to address serious questions regarding the validity of her education and work experience, saying only that Pitcher is "valued."
Some might ask, what's the big deal? It is a big deal.
There are three reasons why shareholders should care about a $10 billion company that has a board member who can't be traced, as they have a right to know just who represents their interests on the board of directors -- especially one as prominent as Pitcher, who is chair of the nominating and governance committees and is a member of the compensation committee.
First, company founder Chip Wilson recently criticized the company and its long-standing directors, some of whom he put in place. In an open letter to shareholders on June 1, 2016, Wilson said the company has lost its way and cited disappointing growth figures in comparison to its competitors, namely Under Armour (UA) and Nike (NKE).
"I feel strongly that our current board and management team must clearly articulate and execute a strategy with urgency toward regaining lululemon's competitive advantage and profitable growth and they must take responsibility," Wilson wrote.
Just last week on CNBC's "Squawk on the Street," Wilson told TheStreet's Jim Cramer in a live interview that it was the long-standing board members who were responsible for the company being run so poorly. But he is the reason Pitcher is on the board; he appointed her as one of his "current designees," according to lululemon's IPO filing.
Since Dec. 2013, the same month the current management team was appointed by the board, shares of Under Armour (UA) have increased 81% and Nike (NKE) by 38%. The S&P 500 is up 15%. Lululemon shares have increased 3% in that time.
Second, the athleisure company is not defending itself, its management or its board from Wilson or answering to these questions. Despite repeated attempts to get answers from lululemon, the yoga-pants maker has stayed silent, unwilling to verify Pitcher's credentials, and has yet to specifically say how Pitcher provides value to the company and its shareholders.
Why can't the company answer these questions about its longest-standing board member?
Finally, it's the shareholders that are paying Pitcher's compensation. Since joining the board in 2005, she has been paid $ 1.7 million in compensation, consulting fees and stock options and awards. In a phone interview Monday, Baruch College Associate Dean Donald Schepers said it's hard to know exactly what Pitcher is contributing.
Real Money reached out to 10 of the top 20 equity holders of lululemon shares to ask if the investment thesis for the Canadian-based company has changed since our story came out last Friday. The replies were all the same: no comment.
Fidelity Management, Capital Research, BlackRock Fund Advisors, and Wellington Management all declined to comment for this story. The Vanguard Group has a note posted on its media page saying it "does not comment on individual securities or sectors."
But individual shareholders should have confidence in the board of a company in which they are part owners.
Meanwhile, if Pitcher's credentials are indeed unverifiable -- and I stress "if" -- the company could ask for her resignation, but can't enforce it. Only the shareholders can remove her by a vote. And Pitcher was just re-elected to the board on June 3, 2015; her term will not conclude until 2018.
So, lululemon shareholders must ask themselves this: who is representing them at this $10 billion company?