Emmanuel Faber. Take note of this name. He’s one of those bold business personality who would be on the front pages if someone ever decided to write a book about visionary CEOs.
In 2014, he was appointed head of Danone (a major international food company). Just like Paul Polman (who got behind the Unilever’s wheel in 2008), Emmanuel too began to prepare a planet-and-human compatible business model. He made tremendous success in a very short period.
“Sustainability” was at the heart of what he did. He did exemplary work for many companies when it came to procurement, production, packaging materials, and waste management. The mathematics of human-centered policies aligned with the ecological environment lied at the heart of all of his decisions. He was known as the architect of a management credo focusing not on short-term but lasting achievements. His company had already boasted the motto “One Planet One Health” .
The pandemic negatively affected Danone, as it did most global companies. Cafes and restaurants remained closed for almost a full year — that upset the company’s finances. Yet, Faber did not give up. He continued to implement policies that would secure the company’s future. Alas, his determination drew backlash from his own company’s so-called “activist investors.” They thought that the company needed to stop dealing with [trivial] “flowers and insects,” and start “making money.” The expected happened: Artisan Partners and Bluebell Capital put a lot of pressure on the company’s management to fire Fiber – and they got what they wanted. These investors thought they “won,” when in reality they “lost!” Time will reveal all…
Let me share with you a memory I have about Danone. Back in 2012, when Faber wasn’t yet CEO, I was a reputation management consultant for the company’s Turkey-based operations. They therefore invited me to Munich, Germany to attend a quarterly agenda meeting of CEOs of 19 countries. I delivered a presentation and then answered participants’ questions. I was very impressed that – at a meeting where an international company’s executives met – they laid the issue of “reputation” down on the table as the “only” agenda item. Even this invitation gave me a clear idea of what the company’s vision was. In other words, the company’s culture was already interwoven with this point of view. Moreover, the fact that Emmanuel Faber was brought into the CEO seat was also directly proportional.
When I link the dismissal of Faber with the background information that I have about him, I’d argue that this decision was a clear loss of “reputation” for Danone. In fact, it’s not easy to grow other crops in the field that a visionary CEO ploughed. One cannot buy that culture with the ambition to make money. As Peter Drucker puts it, “culture eats strategy for breakfast”!
Source of inequality
Investors who waver in the vortex of passion for making money can’t seem to get it through their thick skulls that the world is changing… and that priorities rearrange the walls of life in another order… The “so-called” investors who haven’t come to their senses during the pandemic haven’t yet to find themselves a world where they could spend their hard-earned money – and they won’t!
Injustice in income distribution has been the scorecard of the past 130 or so years. The incomes of the world’s richest 1% are 196 times that of people in the lower tier. This number in the “rich-developed country” (i.e. the USA) is 39 times! The difference between regular workers’ wages and those of CEOs in the US between 1980 and 2019 had reached 264 times. In the 1980s, CEOs earned 42 times higher salaries than regular workers.
About 700 million people live on an income of $1.90 a day. In other words, these people’s annual income is not event enough to buy a mobile phone. 43.6% live on $3.20 a day, while 24.1% live on $5.50 on a day. In other words, the annual income of one in every four people is at par with our monthly energy bill at home! That is 2017 data. Beyond that, let’s note that the average annual arms sales globally speaking is worth $2 trillion. I don’t even want to think about how these numbers could have risen under pandemic conditions! Where does that lead us? If we consider the money-man-planet relationship, we see where those who have done all the decision making for such businesses for the past 130 years have brought out humanity.
Banknotes have turned “morality” into coins. If you combine that with ambition, greed, arrogance and the desire to own more, then you know how Emmanuel Faber got kicked out of his seat. Also, this reveals the character of the “activist investors” who dismissed him. They represent mindset that goes hand in hand with the idea that people can be rich from scraps on the supper table. Yet, this mindset has exhausted its own “shelf life.” It’s only a matter of time before someone throws them into the trash bin of history. They are bankrupt dwarves of Gulliver, who preferred bloated bank accounts to sustaining human development!
You’ll remember that in August 2019, the CEOs of the top companies of the business world signed a statement generated by the [active] lobbyist Business Roundtable. They stressed that “from now on, company’s raison d’être is not to create shareholder value, but policies that create value for all stakeholders.” We all sneered over how “sincere” they were about this. Danone’s blow showed us that it was just “the same old story!” Nothing’s changed!
“Companies that create meaningful and social benefits”
This skew has spawned yet another business model: “companies that create meaningful and social benefits.” The cultural transformation led by visionary CEOs such as Paul Polman (former CEO of Unilever between 2008 and 2018) is not a recent development. However, it has become hope to people like me who “make the journey towards world citizenship.” What did Polman do? He announced that employees would no longer be called to account quarterly. Shareholders would view these accounts at the end of each year. All companies had goals of their to reach in the long term (they shouldn’t have been set aside due to periodic profitability pressures, either). Similar practices have continued even after Polman left. Indeed, Unilever issued a notice to its tens of thousands of suppliers in March 2021 and set targets to improve the quality of life of its suppliers’ employees by 2030.
This determination in the industry’s flagship companies inevitably affects all corners of the world. In fact, what Emmanuel Faber had done was no different. Beyond that, he planned to turn Danone into a “benefit corporation” by 2025. B+’s formed in working life along with ecological and ethical principles, transparency, responsibility and accountability. This was a “league” where usually small enterprises were entitled to become a member through a certification process. That fact that a player as big as Danone wanted to be involved in this league (for the first time) inevitably attracted the attention of other similar companies. Actually, what Faber wanted to do was very simple: He wanted the Danone’s identity to reflect the values of B+’s (i.e. the company’s “raison d’être!”).
Our world is in the wake of troubled days. The climate crisis has yet to turn life upside down. Nevertheless, it did recently conduct a rehearsal in the American state Texas. Millions of Texans were left without electricity for days in the face a very harsh winter. Many could not find water to drink; they lacked fuel to run their heaters. Most didn’t know what they were up against.
We will leave the pandemic behind, of course. But masks, social distance, and hygiene habits will dominate social life for a while to come. We will find the power to overcome this by supporting other Faber’s – and not the greedy, Scrouge-like leaders who unseated him and others like him who strived for a sustainable life, just because they “failed to make enough money!”
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