James Ashton: Swiss new rules set to stop Nestlé from getting on with it
Blue-chip companies rarely talk in public about their 10-year plans, probably because they fear that investors will worry they have lost focus on hitting the next quarterly earnings target. AstraZeneca only paraded its 2024 vision so prominently this week because the drug maker is under siege from Pfizer.
One firm that is a hymn to long-termism is Nestlé, which still follows old-school succession planning the likes of which HSBC favoured in this country until the bank's board decided Michael Geoghegan's face didn't fit.
On a flying visit to London, Nestlé chairman Peter Brabeck-Letmathe, who will retire in 2017 after an unparalleled 49-year career at the KitKat-to-Nescafé giant, talked about developing the business over decades, not narrow reporting periods. Galderma, the skincare venture it is in the process of taking control of from partner L'Oréal, already has a 30-year heritage. Nespresso might feel like a newish brand that gave birth to a whole new grocery category, but Nestlé boffins have worked 25 years to get it this far.
What frustrates Mr Brabeck-Letmathe are Switzerland's new corporate governance rules – not unlike changes already imposed here – that he says breed short-termism. Putting every member of the board up for election every year creates a climate of looking over one's shoulder and a perfect opportunity for the type of activists making hay on Wall Street to get a toehold in his company.
Then comes the pressure to borrow up to the gills in order for shareholders to siphon off cash that might be usefully spent on finding the Next Big Thing. Perhaps less convincingly, he laments that investors who turn up to the annual meeting spend the morning waving voting slips for resolution after resolution, instead of learning anything useful about company strategy.
But his main point stands: it is a fine line between improving accountability and preventing executives from getting on with running a business.
Culinary experts in The Netherlands thought it was 'fresh' and 'tasty'
Of all the computers Apple has ever made there’s only one that Steve Jobs had to sell his car to finance
- 1 As an ex prostitute, I urge all the political parties to commit to the Sex Buyer Law
- 2 Nokia no more: Microsoft drops once-ubiquitous mobile name – in favour of its Lumia brand
- 3 Renee Zellweger on plastic surgery: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 Couple die within 28 hours of each other after being married for 73 years
Renee Zellweger on plastic surgery: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
Isis releases first video showing the stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
Diwali: What is the festival of lights – and how is it celebrated around the world?
Nelson Bunker Hunt dead: Former world’s richest man dies in 'modest circumstances' in US after losing his fortune
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
iJobs Money & Business
£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...