Three days after trying to explain in interviews with various media the dismissal of Gildan founder and CEO Glenn Chamandy, the board of directors of the Montreal clothing manufacturer addressed all shareholders directly in an open letter.
“We now know that Glenn Chamandy had no intention of following the agreed succession plan,” Gildan board representatives said in his message published Wednesday.
Signed by Gildan Chairman Donald Berg and Board Committee Chairs Maryse Bertrand, Luc Jobin, and Shirley Cunningham, the letter seeks to clarify what led to the “unanimous” decision by Gildan directors to dismiss Glenn Chamandy as CEO earlier this month.
The board says it is “disappointed” with Glenn Chamandy’s attempts to disrupt Gildan’s operations “as much as possible” in order to remain CEO.
The missive highlights that Glenn Chamandy has had difficulty finding new avenues for long-term internal growth.
“Over the past two years, the board’s confidence in Glenn Chamandy has gradually weakened as we have entrusted him with responsibility for developing the next chapter of the company’s long-term growth strategy and take care of the development of the people under his direction,” it is stated.
The board believes it was time to consider looking for a leader who would be more successful in fulfilling these “crucial responsibilities for the future.”
It is also added that the scale and complexity of Gildan have increased and the challenges and opportunities ahead require a new leader who brings new ideas and different skills.
The board says it has agreed with Glenn Chamandy on a formal three-year CEO succession plan in December 2021.
The board announced on December 10 that it had chosen to entrust the position of CEO to Vince Tyra and maintains that while Glenn Chamandy had agreed to respect the initial succession schedule, he subsequently acted in a manner to retain his position as CEO. chief Executive Officer.
“The most egregious example of this was his proposal to the board in October that we must, within weeks, agree to actively pursue high-risk, multibillion-dollar acquisitions and leading to significant dilution which would have distanced Gildan from its main field of expertise, manufacturing.
In addition, he asked to remain CEO for several more years to implement this plan. If the board did not approve the timeline he dictated, he told us repeatedly that he would exit in the short term and sell all his shares. »
The publication of this letter comes as the board of directors tries to convince several large dissident institutional shareholders of the merits of its decision.
On Tuesday, Jarislowsky Fraser, who is Gildan’s largest shareholder with a 7% stake, reiterated his opposition to the firing of Glenn Chamandy and spoke about a governance problem at Gildan. Jarislowsky also denounces the recent decision to grant a seat on the board to Coliseum Capital, an American institutional investor which supports the board’s decision.
Browning West, another major institutional shareholder, sent another letter to the board on Wednesday. “While we recently demonstrated our confidence in Gildan by increasing our stake, the misaligned board has spent the last 10 days initiating a blatant retrenchment with a single shareholder while showing a complete lack of consideration for Gildan. “broad and unprecedented shareholder opposition to the board’s actions,” the open letter reads.