The board of Glaxosmithkline has rejected calls for a shake-up of its board after activist investor Elliott Management launched a shock attack on the company’s management.
Elliott yesterday urged GSK to name new board directors and launch a review of Emma Walmsley’s leadership of the company in its first public push for change since its investment in April.
It also called for the British firm to separate its consumer healthcare arm from its pharma business.
But the board today hit back at the demands, saying it “strongly believes Emma Walmsley is the right leader of New GSK and fully supports the actions being taken by her and the management team”.
It added that support for GSK’s strategy and leadership was shown in talks with its largest shareholders.
In a 17-page public letter to the board Elliott blamed “years of under-management” for the pharmaceutical giant’s poor share performance.
It called for the GSK board to renew and bring in independent directors with expertise in biopharma or consumer health, and said “the new, fit-for-purpose GSK Board will then run robust processes for selecting the best executive leadership” from internal and external candidates, for the “new GSK” and its consumer health division.
GSK responded by stating that governance and oversight had been strengthened with the appointment of two new non-executive directors over the last 18 months, and that more biopharmaceutical expertise was on its way with even more appointments, saying this had been flagged previously.
The British drugmaker also defended its decision to transfer majority ownership in the consumer business to its shareholders in a demerger, combined with plans to sell a minority stake in the business in the near future.
“The demerger structure reflects feedback from a significant proportion of GSK’s shareholders that they wish to own Consumer Healthcare as a new listed entity,” GSK wrote.