Gildan’s board of directors counterattacks by accusing former company boss Glenn Chamandy of being an “ineffective” manager, as part of a shareholder fight to determine who should run the Montreal company .
“The board has gradually lost confidence in Mr. Chamandy,” we can read in the letter to shareholders, the contents of which were revealed on Monday. It became clear that he had no credible long-term strategy or vision for the future. »
The board of directors fired Mr. Chamandy at the end of last year and replaced him with Vince Tyra.
The decision created a wave of discontent among major shareholders, including the American firm Browning West and the Montreal asset manager Jarislowsky Fraser, who are demanding the replacement of five directors.
Before Monday, the board of directors explained its decision by a disagreement over the company’s succession plan. He also felt that the former leader of Gildan was not the best candidate to carry out the strategic plan.
In its letter to shareholders, the board goes even further in its allegations against Mr. Chamandy. He claims the former executive was “disengaged” with the company.
“His management style was unstructured, he held few meetings with senior management and rarely showed up in the office, on average only a few days a month, even long after the COVID lockdown ended , we can read in the missive. Mr. Chamandy never visited Gildan’s new manufacturing plant in Bangladesh, one of our most important investments. »
According to the council, Mr. Chamandy was simply not the man for the job. “In the absence of a coherent long-term strategy, Mr. Chamandy moved from one opportunistic strategy to another. It made forays into branded products, retail distribution, international expansion and yarn production, which met with mixed success, resulting in an eight-year annual revenue growth rate of less than 1% and, during this period, write-offs and restructurings of more than $450 million. »
“Questionable behavior”
The administrators also accuse the businessman of having adopted “questionable behavior”. “Mr. Chamandy recorded a private and confidential telephone call that he had on November 24, 2023 with the chairman of the board without the latter’s knowledge. Upon his departure, he also violated the Company’s privacy policies. »
The letter states that the board and the founder had agreed as early as December 2021 to establish a succession plan. Mr. Chamandy, however, reportedly expressed his desire to stay last fall.
Mr. Chamandy would have “presented to the board a plan aimed at carrying out risky and highly dilutive acquisitions worth several billion dollars, arguing that he would then have to remain CEO for several years to supervise their integration,” writes the advice.
“The board had doubts about these high-risk acquisitions, particularly due to Mr. Chamandy’s inability to answer the most basic questions regarding his strategic proposal,” the company continues.
The administrators persist in saying that Mr. Chamandy presented them with an ultimatum. “Instead of providing details of his plan, Mr. Chamandy gave the board a clear and simple ultimatum: the board must support his acquisition strategy and the resulting succession plan, or he will leave the company and sell his actions, immediately. »
By email, Mr. Chamandy referred The Canadian Press to his two December statements in which he denied having given an ultimatum to the board of directors regarding his succession plan or a potential acquisition.
“It is a distraction to divert the attention of shareholders from the way the board managed the succession plan, in which I was not involved,” he reacted in a press release published on December 18.
The businessman claimed after his departure that he had been fired without cause after four decades with the company.