Dye & Durham Ltd. DND-T has shaken up its board barely two months after a dissident slate of directors swept into power at the Toronto legal software company.
The company said Friday that chair and interim director Hans Gieskes has left both positions, though the former chief executive officer of RELX PLC’s LexisNexit unit will remain on the board. He will be replaced as interim CEO by director Sid Singh, while another director, Arnaud Ajdler, has been appointed chair of the board.
The company gave no reason for the surprise move, which follows the Dec. 17 election of a board slate put forward by Mr. Ajdler’s activist New York hedge fund, Engine Capital, including Mr. Gieskes.
The vote was set to be a contested affair after a 10-month campaign by Engine and two other dissident investors until the incumbent slate, including outgoing CEO and driving force Matthew Proud, agreed to stand down at the last minute in the face of overwhelming support for the dissident group.
Mr. Ajdler did not reply to e-mail or phone messages.
In a note to employees obtained by The Globe and Mail, Mr. Gieskes said he decided to step down, writing that his time at the company “has been quite the adventure” and that he had never planned to become CEO permanently. The company is continuing to search for a full-time leader to replace Mr. Singh, CEO of Rectangle Health and a former executive with Equifax Inc. and Global Payments Inc.
Mr. Proud had been a lightning rod of discontent as his leadership and the directors that oversaw him drew four attempts by Dye & Durham shareholders since the fall of 2023 to push for changes to the board. Many investors were unhappy with high management turnover and weak governance, an acquisition strategy that had left the company saddled with high debt and the stock’s disappointing performance. The company also abandoned a potential sale process last fall, blaming investors for showing little interest in the tentative bids on offer they felt undervalued the company.
Dye & Durham’s shares have fallen sharply since the day of the shareholder vote, shedding 40 per cent of their value to close at $11.75 Friday. There have also been a slew of departures over the past two months, including chief operating officer Martha Vallance, the company’s global vice-president of operations and marketing, and the vice-president in charge of Canadian sales.
Earlier this month, the company reported disappointing fiscal second-quarter results, with operating earnings and free cash flow coming in below expectations owing to one-time costs associated with the proxy fight, including $10.8-million in “CEO separation costs” related to Mr. Proud’s departure.