Three days after trying to explain the ouster of Gildan founder and CEO Glenn Chamandy in interviews with various media outlets, the Montreal clothing manufacturer’s board of directors is addressing all stakeholders directly in an open letter.
“We now know that Glenn Chamandy has no intention of honoring the agreed succession plan,” representatives of Gildan’s board of directors said in a message published on Wednesday.
The letter, signed by Gildan Chairman Donald Berg and board committee chairs Maryse Bertrand, Luc Jobin and Shirley Cunningham, aims to clarify what led to Gildan directors’ “unanimous” decision to oust Glen Chamandy as CEO earlier this month.
The board said it was “disappointed” by Glenn Chamandy’s efforts to disrupt Gildan’s operations “to the extent possible” in order to remain CEO.
The missive highlights that Glen Chamandy has struggled to find new avenues for long-term internal growth.
“Over the past two years, the board’s confidence in Glenn Chamandy has steadily weakened as we have entrusted him with the responsibility to develop the next chapter of the company’s long-term growth strategy and focus on people development under his direction.” It is mentioned.
The board believes it is time to look for a leader who will be more successful in fulfilling these “critical responsibilities for the future.”
It also added that Gildan’s scale and complexity had grown, and the challenges and opportunities required a new leader who would bring new ideas and different skills.
The board said it had agreed with Glen Chamandy on a formal three-year CEO succession plan in December 2021.
The board announced on December 10 that it had decided to hand over the CEO position to Vince Tyra, and although Glenn Chamandy agreed to honor the initial succession schedule, he remains CEO. He acted in such a way as to maintain his position as chief. Executive Officer.
“The most striking example of this was the proposal he presented to the board in October, in a few weeks, that we would have to agree to actively pursue high-risk, multi-billion-dollar acquisitions. And that led to significant dilution that would take Gildan away from its core. expertise, in the manufacturing sector.
In addition, he asked to stay as CEO for a few more years to implement this plan. He has repeatedly told us that if the board does not approve the timeline he has set, he will quit in short order and sell all his shares. »
The letter was published as the board of directors tries to convince several large dissenting institutional stakeholders of the merits of its decision.
On Tuesday, Jarislowski Fraser, Gildan’s largest shareholder with a 7% stake, reiterated his opposition to removing Glenn Chamandy and spoke about the governance issue at Gildan. Jarislowski also condemned the recent decision to grant a board seat to US institutional investor Collegium Capital, which supports the board’s decision.
Browning West, another major institutional shareholder, sent another letter to the board on Wednesday. “Although we recently demonstrated our confidence in Gildan by increasing our stake, the misaligned board has initiated a drastic retrenchment with a single shareholder in the last 10 days, while showing a complete lack of concern for Gildan’s actions,” reads the open letter.
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