Fab(er) news: Danone’s CEO just got sacked
No, I was not at all happy to read the headlines two weeks ago
that the most progressive CEO in the world today, Emmanuel Faber had been forced out of Danone by so-called “activist shareholders”. Faber had been a long time champion of stakeholder capitalism and was a strong proponent of healthy foods and environmental causes in the French food giant. Naturally, this had put him firmly in the sites of activist shareholders who bauk at anything that deviates from short term profit maximization. A dip in sales during the current Covid crisis provided the perfect pretext for these corporate vultures to launch an attack. After my initial profound disappointment however, I’m beginning to believe that this could actually be a net positive for the business world and indeed, the wider world. I’ll explain why, but firstly let me provide a little bit of context.
It strikes me as highly ironic that a tiny minority of investors can have such a significant influence on corporate decision-making. In this case it was Bluebell Capital and Artisan Partners, who between them own less than 6% of the shares, who were able to persuade Danone’s Board to oust Faber from the role of Chairman and CEO and appoint Gilles Schnepp as Chairman who, judging by his record as former CEO of electrical firm Legrand, will be a bit more of a traditional shareholder value first kinda guy. Talk about tails wagging dogs.
Frankly, anyone Danone’s Board could appoint would be a disappointment after Faber, who had become the heir apparent to Unilever’s former CEO Paul Polman, as the darling of the sustainability community. Most CEOs know that it’s far safer to keep their heads down and crank out quarter by quarter earnings with little regard for the impact you’re having on broader stakeholders, than to put one’s head above the “purpose parapet”. Grant Thornton’s inspiring CEO, Sacha Romanovitch, discovered this to her cost. Romanovitch was another high profile casualty in October 2018, who dared to suggest that the firm should place a high priority on its purpose if it wanted to attract top talent. Clearly, the antibodies of the corporate immune system tend to get activated by anyone trying to buck the trend and do the right thing, whether a lowly intrapreneur or even the CEO.
So where is the silver lining in Faber’s departure from Danone?
Well, I sincerely hope he takes a bit of a well-earned rest to decompress and reflect on where he wants to go next. At 57 years old, I doubt that he intends to spend the next 20+ years of his life on the golf course or in the garden. However, I could see him playing a very pivotal role as a different kind of gardener if you allow me to continue with a horticultural metaphor. The Fabers. Romanovitchs and Polmans (is the plural Polmen?) are too often like lone flowers that bloom, wither or get plucked by the activist shareholder brigade. We need to create the right soil in which “one thousand flowers can bloom”, within a fertile and flourishing ecosystem, rather than focusing on individual blooms, however bright and beautiful they may be. When you look at picture of a stunning garden, you would rarely see the gardener feature, yet they have played a crucial, but perhaps lower profile, less celebrated role in bringing it to life.
On that basis, I wish Emmanuel Faber all the very best of luck in his work and personal life post Danone and hope that he might consider spending some time in the garden of purposeful business, fertilizing the minds of his fellow CEOs.
This article is an extract from the April edition of The Bullog*, my monthly blog. To read the full blog or to sign up to receive The Bullog directly each month visit………Make sense? Not bulldog, nor is it bulls**t although I’ll let you be the judge of that! It’s a brief synopsis on recent articles, events and opinions from my world and the things that have caught my attention over the past few weeks. www.gibbulloch.com/bullog