Nestle has already made the right move by sacking its chief executive, Laurent Freixe. This decision follows an investigation that found he had a romantic affair with an employee. The weakness, which the company said in an announcement made public on Monday, goes into immediate effect. This action is further demonstration of their deep commitment to corporate stewardship and ethics. Pablo Isla, present chair of Nestle, forced the investigation into Freixe’s actions. With the lead independent director’s full and active support, they provided and demanded successful oversight and accountability.
Freixe came to Nestle almost 40 years ago. In September 2022, he became global chief executive, replacing Mark Schneider. His long tenure was punctuated by his deep experience and extraordinary crises. Earlier this year, the U.S. financial watchdog slapped him with a $400,000 fine for defrauding investors. This incident added to the growing perception of his poor leadership just months before he was shown the door.
Following his firing, Freixe was originally awarded a multimillion-dollar severance package of $105 million. After realizing the impact of public pressure, he returned the full $1.2 million back to Nestle, indicating a recognition of the unique public/private circumstances of his departure.
Philipp Navratil, who joined the world’s largest food maker in 2001, replaces Freixe. Navratil’s years of experience with the company make him a known factor and a solid option to help guide the company into the future.
Nestle has stressed that even with this important leadership transition, the company is still focused on its strategic pivot and long-term performance targets. The company claimed it will not fall behind on results in the wake of Freixe’s departure.
“This was a necessary decision. Nestlé’s values and governance are strong foundations of our company. I thank Laurent for his years of service at Nestlé.” – Paul Bulcke
Even more independent outside counsel backed the investigation into Freixe’s conduct. Their participation meant that there would be an unbiased assessment of the events surrounding his termination. Nestle’s new leadership has an opportunity to double down on its commitment to doing business ethically and with a purpose beyond profits during this transition.