GlaxoSmithKline PLC (LON:GSK) needs to review its top managers ahead of the consumer healthcare demerger, according to activist hedge fund Elliott Management.
The investor asked the FTSE 100 pharma giant to “run robust processes for selecting the best executive leadership… considering both internal and external candidates”.
READ: GlaxoSmithKline quells market concerns for now but hard work yet to start
In a public letter shared on Thursday, it said GSK should also appoint non-executive directors “with deep biopharma and consumer healthcare expertise”.
“Elliott is not advocating a specific outcome but is arguing for a robust process, because it is critical that the board assure current and future shareholders that the new leadership of both companies was selected through a credible process that conforms to corporate governance best practices,” the letter read.
The statement confirms that Elliott, renowned for forcing changes on its portfolio companies, has built a stake in the group.
Earlier this year, the US firm was reported as ringing around major investors to gauge opinion on whether Emma Walmsley is still seen as the best person to run the pharma arm, which Walmsley will head once the business splits.
There has been discussion that her background in Cosmetics at L’Oreal and at the Consumer division of GSK is not appropriate for her to lead GlaxoSmithKline, especially after the spinoff.
"How much of this is due to sexism as Emma Walmsley, is the only woman in charge of a top ten pharmaceutical company is a question. Merck’s outgoing CEO Kenneth Frazier has been lauded by the industry despite having a nontraditional background for Pharma leadership as a lawyer,” Peter Shapiro, senior director of drugs and business fundamentals at GlobalData, told Proactive.
Walmsley presented a detailed plan for GSK’s future last week, showing confidence as she called herself “a change agent, a business leader” when questioned about her competence.
According to analysts at Deutsche Bank, the presentation “delivered a professional and competent impression (not always a given at these events) of a management team intent on executing on reasonable set of growth ambitions”.
Shares rose 1% to 1,437.2p on Thursday morning.