The decision announced a few days ago by the Canadian textile group Gildan Activewear Inc. to separate from CEO Glenn Chamandy and appoint Vince Tyra as his successor was not well received by numerous shareholders. Important investor groups have since publicly expressed their disapproval and called for Chamandy’s reinstatement.
On Wednesday, the group’s board of directors responded to the sometimes harsh criticism with an open letter to shareholders. Chamandy, who is one of the company’s founders, has driven growth and value creation for a long time during his 20 years at the top of the group, but has had difficulties “finding additional ways for long-term organic growth” for four years, it says the writing.
In the last two years, the board of directors’ trust in Chamandy’s leadership had increasingly waned, the board explained. Ultimately, the decisive factor for the separation was the plans presented by Chamandy in October to make “highly risky acquisitions worth billions” in the short term and in this way to divert the group from its core business.
The board of directors also accused the former CEO of no longer adhering to a long-term succession plan that was mutually agreed upon two years ago. Chamandy recently insisted in a media interview that he wanted to decide the time of his departure himself, the letter says.
The conclusion was correspondingly critical: “The Board of Directors is disappointed with Mr. Chamandy’s attempts to cause the greatest possible disruption to Gildan’s business in order to be able to remain CEO,” the board explained. His designated successor, Vince Tyra, is “the right person to lead Gildan during the next stage of development.”