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A group of shareholders is questioning French food company Danone’s commitment to ESG after two activists contributed to the departure of CEO and Chairman Emmanuel Faber, a proponent of purpose-driven capitalism.
Five shareholders collectively owning 0.72% of Danone shares, submitted a proposal at the next annual meeting, demanding each board director to share his or her strategic vision of the group and whether they back Faber’s Local First strategy and its “Entreprise à Mission” status.
“The recent governance crisis at Danone has highlighted both the dysfunctions in terms of form and the disagreements in terms of substance that exist within the company’s board of directors,” said the investor group, which includes PhiTrust, Ircantec, OFI Asset Management, and Mirova.
After pressure from Bluebell Capital Partners and Artisan Partners, Danone’s board ousted Faber but backed the strategy set by him revolving around a reorganization along geographical lines instead of product categories. The investors said that some board members were also opposed to the Local First strategy in addition to Faber continuing as a leader, and demanded more clarity on the directors’ stance.
Danone said its “principle of collegiality” prevents directors “from taking individual positions in public,” adding that the board supports the Local First strategy, while its commitment to the “Entreprise à Mission” status “has never been called into question.”
Danone’s annual meeting will take place on April 29.