Unilever shake-up set to scrap role of co-chairmen
Saturday 05 February 2005
Unilever is poised to announce a shake-up of its corporate governance regime by scrapping its tradition of having co-chairmen and moving to a more orthodox management structure.
It is also set to unveil details of its new business strategy that will move away from its previous focus on turnover growth and shift its emphasis on to maximising shareholder value using the measure of total shareholder returns compared with a peer group of other consumer goods groups.
The new strategy will replace the five-year Path To Growth initiative instigated by former chairman Niall FitzGerald.
On Thursday, the company is expected to say that the co-chairman Anthony Burgmans will assume the role of chairman of Unilever while Patrick Cescau, Mr FitzGerald's successor and the other current co-chairman, will become the chief executive of the Anglo-Dutch group.
However, it is thought the company will stop short of scrapping its dual stock exchange listings in the Netherlands and Britain and is thought unlikely to announce it is merging its two pools of capital spread between the two stock exchanges.
Mr Burgmans' role will be to focus on the strategic future of the company with Mr Cescau being given operational control.
Critics of the company have complained in the past that having two, supposedly interchangeable chairman left the company lacking in focus and resulted in too much bureaucracy.
The new structure will be seen as a more streamlined and less clumsy approach to running the huge Unilever empire. Over the past five years it has been turned around from a lumbering giant with 1,600 brands to a more nimble business with just 400 brands.
Mr FitzGerald, who left to take up the chairmanship of Reuters, the news agency, restructured the group, cutting costs and setting out a series of demanding financial targets.
Although it achieved its goals on earnings and margins, the company failed to hit its projected sales targets in the last two years. The targets were needed to satisfy shareholders who wanted to be reassured that action was being taken.
It is now thought inside Unilever that the time is right to lessen the emphasis on top line growth and place more importance on the concept of how much value the company creates for shareholders.
Under Mr FitzGerald's chairmanship Unilever also embarked on a series of high-profile acquisitions including the purchase of Best Foods in the US and the Ben & Jerry's ice-cream brand.
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