Antony Burgmans, the chairman of Dulux paint manufacturer AkzoNobel who has survived several attempts from activist investor Elliott to oust him from the board, has announced he will step down.
Shareholders would have known this was coming, as it is a requirement under Dutch regulations that a chairman cannot stand for more than three terms.
However, Burgmans seemed to leave open the option that he may find a way around this requirement in "exceptional circumstances".
“Barring any exceptional circumstances, I intend to retire as planned and in-line with the Dutch corporate governance code from my position as chairman of the supervisory board of AkzoNobel, following the completion of my third term in office in April 2018. A process is now underway to identify my successor,” said Burgmans.
Elliott tried repeatedly to get rid of Burgmans earlier this year, after the activist investor became enraged over Akzo's handling of a takeover attempt from American rivals PPG.
Time of instability
The news comes just days after chief executive Ton Buchner stood down for health reasons, to be replaced by Thierry Vanlancker.
The company also announced it would convene an extraordinary general meeting on 8 September to vote in new Vanlancker, following claims from Elliott yesterday that Akzo was putting off communication with shareholders.
However, the only items tabled on this meeting will be the voting in of Vanlancker and the takeover offer from PPG.
There will be no further discussion on a premature ousting of Burgmans, which Elliott has been calling for since April, despite the fact that shareholders with more than one per cent of voting rights should be able to table issues for discussion.
Akzo further announced today that its profits had fallen in the second quarter of this year.
Earnings before interest and tax fell by €30m on the same period last year to €461m, leaving profits for the whole of the first half of 2017 up just one per cent.
Akzo blamed this on "continued weak demand in marine and protective coatings, higher raw material costs and planned maintenance turnarounds in industrial chemicals".
Volumes were up two per cent for the first half, driven by the decorative paints and speciality chemicals branches.
However, the planned divestment of the speciality chemicals area was one reason which Akzo gave for refusing the Elliott-backed takeover attempt from PPG.
Akzo said today that the planned sale of the division was "on track".
Painting over the cracks
To address Elliott's claims about shareholder relations, Akzo has drafted in a team from JP Morgan Cazenove to advise a newly established supervisory board committee on the matter.
"AkzoNobel values its relationship with shareholders and takes its responsibility towards them very seriously. In recent months this relationship, with a particular group of shareholders, has been impacted by events surrounding the company," said Burgmans.
"We have actively reached out to our shareholders to create a plan to strengthen our relationship."