In a significant corporate upheaval, Nestlé has terminated CEO Laurent Freixe amid allegations of an inappropriate relationship with an employee. The company’s board of directors announced the decision on Monday, stating that Freixe’s dismissal stems from a breach of the organization’s Code of Business Conduct. Board chairman Paul Bulcke expressed that “this was a necessary decision,” highlighting the importance of maintaining Nestlé’s values and governance principles. Freixe, who served the company for nearly four decades, will not receive an exit package following his departure.
The allegations against Freixe surfaced when employees reported concerns through an internal hotline. Initial inquiries did not uncover substantial evidence, as Freixe denied any wrongdoing. However, the matter escalated, prompting Bulcke and independent director Pablo Isla to lead a more thorough investigation, enlisting independent legal counsel in the process.
The fallout from this incident represents a considerable shift for Nestlé, which has faced turbulence in its leadership recently. Freixe’s ouster marks the second CEO change in less than a year, following Mark Schneider’s dismissal in August 2024. Ingo Speich, head of corporate governance and sustainability at Deka, a Nestlé investor, remarked, “The loss of two CEOs and a chairman in a year is of historic proportions for Nestlé.” He stressed the urgent need for the new CEO, Philipp Navratil, to restore stability and focus on improving the company’s business model.
Navratil, described by Reuters as “a rising star” within the company, faces the challenge of reviving sales amid declining market performance, the effects of U.S. tariffs, and a lack of investor trust. Nestlé, the largest food company in the world with annual sales nearing $103 billion, is under pressure to adapt and strengthen its position in an increasingly competitive environment. Analysts note the critical importance of identifying growth opportunities, particularly in emerging markets, as part of the company’s strategy moving forward.
This leadership shakeup comes on the heels of a national conversation regarding professional conduct and corporate governance, particularly in light of other high-profile resignations related to workplace relationships. Such developments raise broader questions about ethics and accountability at the executive level, as companies recognize the need for a clear and strong adherence to their internal codes of conduct.
“The new CEO needs to fix the business model and bring volumes back,” Speich emphasized, underscoring a sense of urgency at Nestlé to navigate these turbulent waters effectively. With so much at stake, how Navratil shapes the company’s future will be closely monitored as he takes on the mantle from Freixe.
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