Herbalife Ltd. (NYSE:HLF) has appointed former US Under Secretary of State Maria Otero to its board of directors, the company announced in a statement. Otero has also served in the UN Advisors Group and on the board of multiple humanitarian organizations, and strengthening the company’s image is probably a big part of why she was asked to get involved.
“For more than 30 years, I have focused on helping individuals empower themselves through work, so they can take control of their own lives. I have seen first-hand the power of giving those individuals and entire communities the chance to realize their potential,” said Otero. “Having spent a lot of time getting to know Herbalife, I am convinced this is a company that shares my belief in the positive impact that economic empowerment can bring to society.”
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Otero latest to praise Herbalife
Otero’s praise is reminiscent of former US Secretary of State Madeline Albright’s recent speech praising the company, calling it “very democratic” and extolling the way it empowers people. Following her speech, Dan McCrum at FT wrote that “It is one more reminder that while there are considerable problems with Direct Selling Industry practices, it remains a well-connected industry in Washington where any change to regulation and the law would have to be forced through.” The appointment of a well-connected politician, even if she’s not well-known outside of Washington, would seem to reinforce McCrum’s concern.
Bulls coming out on top so far in Herbalife battle
Herbalife Ltd. (NYSE:HLF) supporters can point to Otero’s appointment as proof that the company really does help people by creating financial opportunities where none exist, while detractors will say that this is just political cover for a company with an unethical business model.
Investors have fought over the company in the last year, with hedge fund manager Bill Ackman saying that he will short Herbalife “to the end of the earth.” But right now it looks like the bulls are winning. Herbalife recently hit a 52-week high, and a Belgian appellate court has ruled that it is not a pyramid scheme. A similar case is still working its way through the US legal system, but the company’s management appears confident that it will ultimately win that case as well.