Why reappointment of Sanjay Dalmia to GHCL board was rejected at AGM? Shriram Subramanian explains

economictimes.indiatimes.com:

This is more a messaging by investors to the board and the management to tune up and take the company to the next stage, says Shriram Subramanian, Founder & MD, InGovern. Chemicals company GHCL's proposal for the reappointment of promoter and non-executive chairman Sanjay Dalmia to the board failed to get enough votes at its AGM on Saturday.

Earlier, we have seen shareholder activism centred around CEO compensation in case of other companies. Rarely have we seen minority and institutional investors combined voting against the current chairman and his extension.

It is not surprising given that the performance of GHCL has been flagging a bit and the investors wanted change and this was something that was sort of expected.I was looking at the profitability of GHCL. Why do you think it was expected? The fact is the shareholders wanted change.

The stock price has been range-bound while the market has surged. From that perspective, especially in the last one or two years, shareholders were angry and they wanted change.How should investors look at this stock now? Do you think the change of the chairman at GHCL will augur well for minority shareholders? If there were challenges and institutional investors were not very happy, looks like the change of guard should benefit the stock? Yes, immediately, yes.