The departure was more than striking, because only a few months earlier the shareholders had almost unanimously expressed themselves in favor of the course set by Faber: Danone became a ‘business to mission’, a commercial company that aims to benefit society. Danone also acquired B-Corp status under his rule. In doing so, a company promises to contribute to the well-being of employees, society and the climate.
It goes without saying that Faber mentions this course in conversation with Het Financieele Dagblad. Not idealistic, but necessary: ”Companies that do not make progress with social and climate goals will have a very difficult time. The pressure comes from everywhere: from employees, from governments, from judges – most recently in Germany. And the financial markets are now also looking at things differently. things like climate-related risk reporting, this has always been obvious to me.”
Now that the board has declared it will continue the course I have developed, the activists will return
After his departure, French politics questioned the unexpected maneuver at large corporations, which as ‘untouchable’ is vital for the French economy.
Earlier, Faber said that the supervisory directors have ‘compromised’ themselves by listening to the activist shareholders – including the Dutchman Jan Bennink, former boss of Numico and Douwe Egberts. They also play a ‘risky game’. “I’m not against activist shareholders, don’t get me wrong,” Faber says. “They keep a company sharp. But with my departure, the activists at Danone have received more than they thought. Now that the board has stated that it will continue the course I developed, the activists will return. The directors have compromised themselves by sacrificing me and that makes them vulnerable in the fight with the activists.”
The future is local
After all, Danone’s problem still stands. The share price is structurally lagging behind that of competitors such as Nestlé and Unilever. Faber carried out 5 reorganisations in the 7 years that he was the CEO. Focused on the long term. “Centralization and standardization are management concepts from the recent past,” he says. “The time of globalization is over. The future is local and Covid has only reinforced that trend.” He didn’t get his supervisory directors with him in that attitude, he says looking back. “I wanted to change the system from within”. More diversity in the board and especially strong independent supervisors from outside and not from the circle of the old boys network.
Faber mainly blames himself for not being able to communicate his vision sufficiently to consumers. “That’s one of the hardest things to look back on. I would have liked to release more new products. Even though I doubled the number, the food revolution has accelerated even more, with a shift to plant-based and locally sourced foods and smaller brands.”
The status as a B-Corp also appears to mean little to consumers. Yes, the message ‘Bottles made from bottles’ with the recycled Evian bottles did get across. But the fact that Activia yogurt is good for health still upset customers a few years ago. “Danone also has a large group of conservative customers who just want to buy yogurt. You don’t want to put them off.” In addition, food is too cheap and you cannot simply pass on the costs of greening to consumers. “Then consumers will buy non-sustainable alternatives. There should be 10% to 20% on top.”
Emmanuel Faber, screenshot of a speech at business school HEC about his mentally disabled brother