Ted Baker storeimage rights
Reuters

Ted Baker's investigation of complaints about the founder's conduct will be led by one of the two recently appointed external directors.

Details of the investigation to be overseen by Sharon Baylay will be announced on Thursday along with a trade update, chairman David Bernstein told the BBC.

Male and female employees have agreed to sign a petition complaining about Ray Kelvin's behavior.

He allegedly hugged workers and kissed their necks and ears.

Mr Bernstein said the investigation would be "professional, impartial and step by step".

Ms. Baylay, who served as director in June, is the former Digital Marketing Manager of Microsoft UK and Director of Marketing, Communications and Audience for the BBC.

Top investors in Ted Baker fear that Mr Kelvin's alleged conduct, which is also a director, could cause serious financial harm to the company and raise cultural issues.

The company's shares have fallen by a quarter since the allegations were made over the weekend.

  • Ted Baker employees start petition for "forced hug"
  • "Ted Baker boss danced slowly"
  • Can you refuse a hug from your boss?

A senior shareholder of Ted Baker told the BBC that insecurity was "a significant problem".

"Ray Kelvin owns 35% of the company's stock, you have a rather weak board and he is the driving creative force of the company," said the investor.

Dismissing him would mean "losing the man who has led the company to success – and you have a potential bestseller for the stock that will affect the stock price"

Whatever the outcome of the investigation, Ted Baker is another example of the problems that shareholders have when investing in a public company, namely the creation of a person with unrestricted influence and power.

risks

The stock of the fashion label Superdry has more than halved when Julian Dunkerton, founder, creator and major shareholder, left the company and began to sell his stake.

The advertising giant WPP stock was already on the way down when founder Sir Martin Sorrell left the company but lost another 20% after his controversial exit. He has already outbid his old company on a major acquisition.

There are other examples – it is hard to imagine Sports Direct without the hard-working, well-known founder Mike Ashley at the top.

When you shop into such companies, you are more likely to buy an individual than a company with an institutional identity that is different from its founder.

This brings additional financial risks, as Ted Baker shareholders already know.