Last month brought with it the news that Unilever CEO, Alan Jope, would retire from his post at the end of 2023 after a 37-year career with the international consumer goods group. Although many would consider such a long notice period (fifteen months) unusual, the decision to announce his departure so early is reflective of the nature of his tenure.
Jope’s reign has been mired in controversy, with his stoic stance on purpose causing considerable discord amongst investors. Terry Smith of Fundsmith was perhaps the most vocal critic of Jope’s stewardship, declaring in January that the firm had become, “obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of business.” He went on to point out that, “A company which feels it has to define the purpose of Hellmann’s mayonnaise has…clearly lost the plot.”
Whether you agree with Smith’s interpretation or not, the fact is that Unilever has struggled with growth under Jope’s guidance. In our previous article, ‘Three Things for Managing Investor Pressure’, Bruno Monteyne, Managing Director and Senior Analyst at AB Bernstein explained: “[Unilever’s] growth has been low – around 3% – and if you strip out inflation, you are left with almost no growth at all.”
To compound Jope’s misery further still, however, Unilever have also disgruntled one of their most purpose-driven enterprises, the global ice cream brand, Ben & Jerry’s. In an unprecedented turn of events, the subsidiary has actually filed a lawsuit against its parent company for breaching a contract designed to ensure the brand’s social values are maintained.
The entire debacle centres upon B&J’s decision to withdraw from Palestinian territories occupied by Israel, and Unilever’s subsequent sale of the Israeli distribution licence for the ice cream brand. B&J allege that they were not consulted about the sale, despite the existence of an independent board appointed specifically to evaluate, and then approve or veto, decisions with social implications.
In essence, although Jope’s intentions have been honourable – and are certainly not the primary reason for all the dissension surrounding his time as CEO – they have undoubtedly distracted investors and raised questions over Unilever’s integrity. To make sure our often highly purpose-driven members don’t suffer the same fate, we thought we’d share some pointers from Sally Bailey, the former CEO of White Stuff, shared during one of our previous CEO Circles.