"Last week, Nestlé, the $244 billion food conglomerate behind some of the world's most beloved candy and coffee brands, announced that its CEO, Laurent Freixe, had been dismissed for violating the company code of conduct after just one year on the job. An investigation had confirmed reports that he was having an inappropriate relationship with a direct report, the company said. Nestlé, a category laggard whose share price has been slipping, had already installed a new CEO, Philipp Navratil, an internal hire who previously led the company's Nespresso business."
"Boards have less tolerance now for CEO misconduct, like office romances, compared to 20 or 30 years ago, and are generally moving quickly to replace problematic leaders. The exits following a scandal like this can be far more punitive than when leaders are removed for performance issues, often with "golden parachutes." As my colleague Eva Roytburg reported, Freixe left Nestlé without any pay package."
Nestlé dismissed CEO Laurent Freixe after an investigation confirmed an inappropriate relationship with a direct report. The company already installed Philipp Navratil, an internal hire who previously led Nespresso, while Nestlé's share price has been slipping. Boards now show far less tolerance for CEO misconduct such as office romances and are moving quickly to replace problematic leaders. Exits after misconduct scandals can be more punitive than performance-based removals, sometimes involving no severance. Tougher enforcement reflects concerns about both internal and external perceptions and heightened expectations across company ranks.
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