Thursday, April 15

The fall of Emmanuel Faber, social face of French capitalism | Economy


Emmanuel Faber, former CEO of Danone.
Emmanuel Faber, former CEO of Danone.PATRICK KOVARIK / AFP

Emmanuel Faber (Grenoble, 57), who lost his post as head of the French group Danone on Monday, was an atypical business manager. Faber, relieved after months of campaigning by various investment funds who reproached him for his mediocre results and his leadership style, ran a publicly traded multinational with 100,000 employees and present in more than 120 countries. At the same time, he was an implacable critic of globalization, he placed an environmental and social discourse at the center of his project, and at the slightest occasion he launched depth charges against capitalism based solely on the multiplication of profits.

“The very idea of ​​the company being made to maximize shareholder value is heresy,” Faber told EL PAÍS in May 2019, when the centenary of the founding of the company by Isaac Carasso, a Sephardic from Thessaloniki settled in Barcelona.

Now it is these same shareholders who have thrown him out of the presidency of the group, after being forced at the beginning of the month to resign as CEO. The group’s shares rose as much as 5% after Faber’s departure was announced early in the morning.

“The advice [de Administración] has terminated the functions of Emmanuel Faber as President-CEO, and has appointed Gilles Schnepp as Chairman of the Board of Directors with immediate effect, ”Danone announced in a statement. Schnepp, a former patron of electronics company Legrand, had joined Danone’s board last December, when the pressure on Faber to step down was already becoming untenable. Schnepp will be supported by Véronique Penchienati-Bosetta, current International CEO, and Shane Grant, CEO North America, who will share the CEO role on an interim basis while a replacement is sought.

The Artisan Partners and Bluebell Capital funds were the promoters of the removal of the president and CEO. Faber had become a symbol of capitalism with a human face, leading a company that, since the 1970s, with the Riboud family at the helm, was a forerunner of the company’s social responsibility. In the statement, the Council declares itself “convinced of the need to combine a high level of economic results with respect for the unique model of companies with a mission that is Danone”.

Investors’ arguments for dumping Faber included the fact that Danone had lost its footing to its major agri-food competitors such as Nestlé and Unilever. The world I remembered Monday that since Faber came to the top of the Paris-based multinational in 2014, Unilever’s shares had increased by 70%; those of Nestlé, 45%; those of Danone, less than 3%.

The Covid-19 pandemic hit Danone especially hard. Among other reasons, due to the closure of restaurants and canteens and the fall in traffic at airports and train stations, where the sale of non-ecological bottles of water collapsed. “In total, the crisis has made us lose nearly a billion euros in sales. Danone has suffered a shock of unprecedented violence ”, Faber declared in January to the newspaper Sunday Newspaper.

The Danone boss had just started the project Local first (local first), which should give greater autonomy to local managers, based on the idea, according to Faber, that more than 90% of products are consumed in the country of origin. The announcement, in November, of the elimination of 2,000 jobs around the world did not help him either, and earned him criticism from the French Minister of Economy himself, Bruno Le Maire, which placed the boss who was the flag of his company in an uncomfortable position. social conscience.

According to the weekly L’Obs, even Franck Riboud, honorary president, heir to the historical family associated with the brand and in the past protector of Faber, had criticized his former pupil for “worrying more about the future of the planet than that of the company” and for “Centralize power, in the opposite sense of the Danone culture”. One of the reproaches made to Faber was the personalism and overexposure of a media figure that has ended up turning against him.

The debate is whether Faber has fallen as a visionary, because he wanted to put the protection of the planet before the fight for profit, or if he has simply been fired for a bad manager.

Last June, 99% of shareholders voted in favor of turning Danone into a “company with a mission”, a legal framework that obliges it to take into account social and environmental objectives. “You have just demolished the statue of Milton Friedman,” Faber said then, referring to the Nobel Prize in economics, who died in 2006, who, in a famous article published half a century ago, stated that “the social responsibility of the company is to increase the Benefits”. The fall of Emmanuel Faber has many explanations, but it can also be understood as the posthumous revenge of Milton Friedman.

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