The International Anti-Counterfeiting Coalition backed off plans to create a new membership category to admit Alibaba and has hired a firm to investigate its own corporate governance procedures under intense pressure from some of its members.
The non-profit group, which battles the trade of counterfeit goods on the behalf of more than 250 global brands, disclosed the decision May 13 in response to “an anonymous letter that has been recently circulated, expressing concerns about the IACC President Bob Barchiesi, and the organization’s operations and governance.”
In an open letter to members published on its website, IACC confirmed that its board of directors did not learn of certain financial transactions and conflicts of interest Barchiesi disclosed then in IACC’s annual IRS Form 990 and other forms until after the forms were filed, but attributed its ignorance to a weakness in its own corporate governance procedures.
“This failure to disclose was not attributable to inaction on Bob’s part,” the IACC board wrote in its letter to members, which commended Barchiesi for nearly doubling its membership over the past eight years. “We believe that Bob’s performance and accomplishments as President have been exemplary, and he has the Board’s full confidence and support.”
Still, IACC said that upon further “consideration of some of the concerns raised by our membership, Bob has recommended, and the Board has agreed, to suspend the recently announced General Membership category to allow further discussion and consideration. This will result in the suspension of the memberships of Alibaba, Wish.com and The RealReal at this time. This will not affect our existing relationship or joint initiatives with them. We continue to stand by our inclusive approach to working with intermediaries.”
IACC also said it had hired an independent firm to review, develop and recommend the implementation of corporate governance measures, internal controls, policies, procedures and by-laws to ensure that they meet the highest standards and fit the current size and scope of our organization.
Gucci and Michael Korrs renounced their membership in IACC in the last month to protest its decision to admit Alibaba as a member despite lingering questions about its commitment to fight the sale of counterfeit goods on its Chinese websites, including Tmall.com and Taobao.com.
The American Apparel and Footwear Association continues to press Alibaba to create a more transparent system that makes it easier to remove counterfeits permanently from their sites. As of last week, AAFA was still waiting for Alibaba to propose such improvements.