Danone deposed stakeholder-capitalism proponent Emmanuel Faber this week.
Good morning.
Few CEOs have made a stronger commitment to stakeholder capitalism than Danone’s recently deposed Emmanuel Faber. He was the first to adopt the French government’s new Entreprise à Mission model of corporate governance and he was working to become a B Corporation as well. When he spoke with Ellen McGirt and me for our podcast Leadership Next, he told us:
“We want Danone to become a B Corp because we believe that in the world in which we live, and certainly in the world we are entering right now, there will be increased attention paid to the ethos of companies and of brands by consumers, governments, employees, civic society, and many more.
“Look at the reality. There are many stakeholders jumping into the scope of our business, whether we like it or not. When governments are just shutting down borders, forbidding exports or imports, when they are forcing localization, when in Argentina you have nationalization of soy companies…When health authorities are closing channels and sending everyone home…these are all stakeholders. Stakeholder capitalism is a fact.”
Some shareholders seem to disagree. They’ve been frustrated that Danone’s returns underperformed comparable companies like Nestlé and Unilever. And they demanded—and got—change at the top. What remains to be seen is whether new management can improve relations with shareholders without throwing Faber’s stakeholder approach under the bus.
This, of course, is similar to the battle Unilever went through in 2017 when challenged by Kraft-Heinz, which we talked with former CEO Paul Polman about, also on Leadership Next. Polman won that battle, and ultimately proved that what was good for stakeholders also was good for shareholders. Danone’s challenge now is to do the same. Stay tuned. The future of capitalism hangs in the balance.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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This edition of CEO Daily was edited by David Meyer.
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