SCHLIEREN, SWITZERLAND — Contentious discussions surrounding the makeup of Aryzta AG’s board of directors and executive leadership team continued this week as the Swiss-based company on Aug. 18 said further talks with shareholder group Veraison and Cobas failed to resolve disagreements between the two groups.
Gary McGann, chairman of Aryzta AG, unveiled in a July 20 letter to shareholders that he plans to step down from his post at the conclusion of the company’s extraordinary general meeting (EGM) set for Sept. 16. That followed the shareholder group’s call for the removal of Mr. McGann as chairman and the installation of Urs Ernst Jordi as his replacement. Mr. Jordi is former head of Aryzta Europe and former chief executive officer of Hiestand Holding AG.
On Aug. 18, Aryzta’s board instead proposed the election of Andreas G. Schmid as member and chairman of the board. According to the board, Mr. Schmid has established “an impressive track record of delivering against turnaround situations, proven public company and chairmanship experience, and is one of Switzerland’s most distinguished business leaders.”
“Current circumstances necessitate a proven business leader with extensive expertise of board leadership, within complex, multi-national, publicly-listed companies of scale,” Aryzta said. “The board believes Andreas G. Schmid’s highly effective board leadership is in the best interests of Aryzta and all its stakeholders.”
In addition, the board proposed the election of Jim Leighton, Tim Lodge and Mr. Schmid as members of the Remuneration Committee following the resignations of Mr. McGann, Dan Flinter and Rolf Watter from the board of directors and the Remuneration Committee.
Meanwhile, Aryzta’s board said it would support two of the shareholder group’s candidates “provided they have suitable qualifications and experience and observe a nominations process, which is fully consistent with internationally recognized standards and good governance practice.”
“The nominations process is rooted in a desire to appoint board members who will provide the most independent and effective leadership for Aryzta,” the board said. “To date, the shareholder group has refused to submit any of its candidates for evaluation through either an established or modified nominations process. Therefore, the board cannot support any of the candidates proposed by the shareholder group.”
The shareholder group claims, however, that it offered evaluations at the end of July and as recently as Aug. 10.
“It is inexplicable that the offer was ignored by the board of directors of Aryzta,” Veraison said.
The shareholder group also has pushed for the removal of Kevin E. Toland, chief executive officer, as a member of the board. But Aryzta’s board has held steadfast to its belief that Mr. Toland should remain, and on Aug. 18 the board rejected the shareholder group’s proposal to remove Mr. Toland.
“Any diminution of his leadership, role or authority, increases business risk and is not considered to be in the best interests of Aryzta,” Aryzta said. “His leadership is integral to the business as it continues to manage through the COVID-19 crisis and provides effective executive representation at board level.”
The Aryzta board also rejected the shareholder group’s proposal to remove Annette Flynn as a member of the board.
“The importance of her role as chair of the Audit Committee has increased given the resignation of Frederic Pflanz as CFO (effective end of calendar year 2020), the recent election of new auditors at last year’s AGM and the challenging circumstances arising from COVID-19,” Aryzta said.
Aryzta’s EGM is scheduled for Sept. 16.