The dairy giant announces management shake-up prompted by shareholders calling for the departure of Emmanuel Faber
Danone has begun the search for a new chief executive following the company’s decision to separate the functions of chairman and chief executive in the near future. As a result, Emmanuel Faber will focus on his role as non-executive chairman once the new management leader is appointed.
The management shake-up was prompted by shareholders who despite backing Faber’s revamp strategy, Local First, called for his departure.
Local First was a recovery plant announced in November, which included management changes and plans to sell underperforming businesses in a move to help swing the stocks up as the company recovers from the shock of Covid-19 in the business.
Dissidents shareholders are said to be led by Blue Bell Capital and US fund Artisan Partners.
Investors criticised Danone’s chief for not delivering shareholders returns on par with other food giants such as Nestlé and Unilever. Shareholders also voiced disagreement for not investing in portfolio brands as a means to increase short-term profitability.
Danone announced that while Faber remains in his dual role, he will lead the implementation of the Local First plan.
In detail, the adaptation plan seeks to unify the management entities in each country, grant them greater autonomy, to simplify the decision-making process, to generate substantial savings and to invest to deliver profitable growth.
Danone also announced the appointment to continue strengthening its governance”. The company named Gilles Schnepp as vice-chairman together with Cécile Cabanis and entrusted Jean-Michel Severino with the responsibilities to lead independent director and chairman of the Governance Committee.
Commenting on the announcement, Faber, said: “I am pleased we took the governance arrangements that will allow us to anticipate the next phase of development of the truly unique company Danone is, as we open, with our Local First plan, a new step towards the company’s reinvention. I want to thank all our shareholders, my colleagues of the Board, our employees and social partners who contributed to making these decisions emerge. I am convinced they will make the execution of our plan and our mission much stronger.”
Faber took up the chief executive role of Danone in 2014 and has moved the company towards greater ESG credentials ever since.
In June, the company became the first listed company to adopt the shareholders-driven model introduced by French law in 2019, committing to pursuing social, societal and environmental objectives that reflect its conviction that the health of people and the preservation of the planet are interdependent.
He has also led strategic M&A deals and investment activity. Last year, Danone announced a €100 million investment to strengthen its specialised nutrition business in China, invested in allergy prevention foodtech start-up Ready, Set, Food!, and acquired specialised nutrition company Real Food Blends. The M&A activity continued with the latest acquisition of plant-based dairy company Earth Island.
Date published: 2 March 2021